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While the Company saw gains in each of its three reportable business segments, it cited the 51% increase in Software Development revenues as the main driver of fiscal year results, as this unit completed four major software development projects during the year, generating approximately $6.5 million in revenues. Additionally, the Company said revenues from Online Insurance Advertising -- representing 61% of total revenues during the year -- increased 19% to approximately $11.24 million as of June 20, 2009, while Insurance Agency revenues grew 65% to $510,332, following the Company's acquisition of Guang Hua Insurance Agency Company Limited ("GHIA") in October, 2008.
For the year ended June 30, 2009, the Company said its Cost of Sales increased 62% to 12% of net revenues, or approximately $3.13 million, primarily as a result of higher amortization and an increase in business tax. The Company also noted that during the most recent fiscal year, selling expenses increased to 2% of net revenues, primarily in connection with the growth in the operations of its insurance agency company. It also recorded growth related increases in advertising and general and administrative expenses.
The gross profit contribution of Software Development increased approximately $2.2 million, or 52%, to approximately $6.4 million during the most recent fiscal year, while Online Insurance Advertising gross profit increased approximately $1.45 million, or 16%, to approximately $10.33 million. The Insurance Agency generated a gross loss during the fiscal year of $225,047.
Ms. Betty Xu, CEO of China INSOnline, stated, "In 2009, China has become the largest Internet market in the world, with an estimated 400 million users by year end, and our insurance website www.soobao.cn is becoming an increasingly important part of the landscape. Growing Internet use makes our site an ideal media for insurance trade professionals and insurance companies for concentrated advertising to potential insurance customers. Our plan is to steadily increase our brand popularity in the industry, to seek regional channel agents for ads and introduce Soobao to first and second-level cities across the country with an aim toward national distribution of direct-marketing of insurance."
"To date," Ms. Xu said, "we also have provided website construction services to more than 7,340 insurance agents in the Beijing area and we fully expect to sustain our leading position by continuing to build our brand name."
She added, "As a result of our acquisition of GHIA in 2008, we also are qualified to do business as an insurance agent throughout all of China. While insurance services to date have been a small fraction of our revenues, we are looking to expand this business and see insurance sales commissions as a vital business for profit and growth."
Mr. Zhenyu Wang, Chairman of the Company, stated, "I believe we have been able to adjust the Company's strategies to reflect the ongoing changes in the economy. Property and life insurance offerings will continue to expand along with our focus on online auto insurance, which is operating in a strong growth environment as China's auto sales have resumed the double digit growth they experienced before 2008. While we believe our www.soobao.cn portal will continue to pave the way for future growth, we remain focused on supplementing online activity with a comprehensive chain insurance supermarket entity."
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, 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
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
Year Ended Year Ended
June 30, 2009 June 30, 2008
------------- -------------
REVENUES, NET $ 17,976,529 $ 13,735,376
COST OF SALES 2,133,169 1,313,582
------------- -------------
GROSS PROFIT 15,843,360 12,421,794
Selling expenses 281,540 167,903
Advertising expenses 1,912,725 962,160
General and administrative expenses 1,311,384 808,432
------------- -------------
INCOME FROM OPERATIONS 12,337,711 10,483,299
------------- -------------
Interest income, net 24,718 19,904
------------- -------------
INCOME FROM OPERATIONS BEFORE INCOME TAXES 12,362,429 10,503,203
Income taxes 3,184,828 2,166,846
------------- -------------
NET INCOME 9,177,601 8,336,357
OTHER COMPREHENSIVE INCOME
Foreign currency translation (loss) gain (13,398) 725,006
------------- -------------
COMPREHENSIVE INCOME $ 9,164,203 $ 9,061,363
============= =============
NET INCOME PER SHARE
BASIC AND DILUTED $ 0.23 $ 0.25
============= =============
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC AND DILUTED 40,000,000 33,946,666
============= =============
Contacts: HM Yun Chief Operating Officer Email: man@soobao.cn www.china-insonline.com Ken Donenfeld DGI Investor Relations donfgroup@aol.com
SOURCE: China INSOnline Corp.
mailto:man@soobao.cn http://www.china-insonline.com mailto:donfgroup@aol.com
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