Full Press Release Details
Medical Group Holdings Announces First Quarter 2025 Financial Results
Calif., May 15, 2025 (Business Wire) -
SBC Medical Group Holdings Incorporated (NASDAQ: SBC, "SBC Medical" or the "Company"), a global owner, operator
and provider of management services and products to cosmetic treatment centers, today announced its financial results for the three months
ended March 31, 2025.
Quarter 2025 Highlights
Aikawa, Chairman and Chief Executive Officer of SBC Medical, said, "SBC is actively preparing for strategic expansion by enhancing
its platform, optimizing its profitability structure, and stabilizing its business through revised pricing strategies and adapting to
changing market dynamics. In the first quarter of 2025, we were pleased to see the expansion of Medical Corporations (MCs) gaining traction
in our franchising, procurement and rental business segments as global demand for aesthetic medical services continued to rise; meanwhile,
revenue decrease in the quarter primarily reflected the discontinuation of our staffing business and divestures of Sky Net Academy ("SNA")
and SBC Kijimadaira Resort ("Kijimadaira"). In the midst of this transition, operating margin improved from 45% in
the first quarter 2024, to 51% in the first quarter 2025. Additionally, net income attributable to SBC Medical Group increased 15% year-over
year, further demonstrating the strength of our business model transition and execution. As we move ahead, we remain confident in our
ability to build a scalable franchise model while accelerating expansion across domestic and international markets, driving long-term
value for shareholders and positioning the Company to capitalize on future opportunities."
and EBITDA Margin are non-GAAP financial measures. For more information on non-GAAP financial measure, please see the section of "Use
of Non-GAAP Financial Measures" and the table captioned "Unaudited Reconciliations of GAAP and Non-GAAP Results."
The number of customers takes into account customers of SBC brand clinics, Rize Clinic and Gorilla Clinic, but does not take account
customers of AHH Clinics
The number of customers takes into account customers of SBC brand clinics, Rize Clinic and Gorilla Clinic, but does not take account
customers of AHH Clinics, but excluding free counseling
Quarter 2025 Financial Results
revenues were $47 million, a decrease of 14% year-over-year reflecting the negative impact of the discontinuation of the staffing business
and the disposal of subsidiaries partially offset by increased demand for medical materials and equipment from the expansion of Medical
income for the three months ended March 31, 2025 was $22 million, compared to $19 million in the same period of 2024. The increase was
largely attributed to the impact of a special gain associated with the maturity of a life insurance policy.
was $25 million, a decrease of 3% year-over-year primarily driven by lower in revenue following the termination
of the staffing services business and the deconsolidation of SNA and Kijimadaira.
Medical, headquartered in Irvine, California and Tokyo, Japan, owns and provides management services and products to cosmetic treatment
centers. The Company is primarily focused on providing comprehensive management services to franchise clinics, including but not limited
to advertising and marketing needs across various platforms (such as social media networks), staff management (such as recruitment and
training), booking reservations for franchise clinic customers, assistance with franchise employee housing rentals and facility rentals,
construction and design of franchise clinics, medical equipment and medical consumables procurement (resale), the provision of cosmetic
products to franchise clinics for resale to clinic customers, licensure of the use of patent-pending and non-patented medical technologies,
trademark and brand use, IT software solutions (including but not limited to remote medical consultations), management of the franchise
clinic's customer rewards program (customer loyalty point program), and payment tools for the franchise clinics.
more information, visit https://sbc-holdings.com/
of Non-GAAP Financial Measures
Company uses non-GAAP measures, such as EBITDA, in evaluating its operating results and for financial and operational decision-making
purposes. The Company believes that the non-GAAP financial measures help identify underlying trends in its business. The Company believes
that the non-GAAP financial measures provide useful information about the Company's results of operations, enhance the overall
understanding of the Company's past performance and future prospects and allow for greater visibility with respect to key metrics
used by the Company's management in its financial and operational decision-making.
non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial
measures have limitations as analytical tools, and when assessing the Company's operating performance, cash flows or liquidity,
investors should not consider them in isolation, or as a substitute for net loss, cash flows provided by operating activities or other
consolidated statements of operations and cash flows data prepared in accordance with U.S. GAAP.
Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures,
all of which should be considered when evaluating the Company's performance.
more information on the non-GAAP financial measures, please see the table captioned "Unaudited Reconciliations of GAAP and Non-GAAP
press release contains forward-looking statements. Forward-looking statements are not historical facts or statements of current conditions,
but instead represent only the Company's beliefs regarding future events and performance, many of which, by their nature, are inherently
uncertain and outside of the Company's control. These forward-looking statements reflect the Company's current views with
respect to, among other things, the Company's financial performance; growth in revenue and earnings; business prospects and opportunities;
and capital deployment plans and liquidity. In some cases, forward-looking statements can be identified by the use of words such as "may,"
"should," "expects," "anticipates," "contemplates," "estimates," "believes,"
"plans," "projected," "predicts," "potential," or "hopes" or the negative
of these or similar terms. The Company cautions readers not to place undue reliance upon any forward-looking statements, which are current
only as of the date of this release and are subject to various risks, uncertainties, assumptions, or changes in circumstances that are
difficult to predict or quantify. The forward-looking statements are based on management's current expectations and are not guarantees
of future performance. The Company does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking
statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement
is based, except as required by law. Factors that may cause actual results to differ materially from current expectations may emerge
from time to time, and it is not possible for the Company to predict all of them; such factors include, among other things, changes in
global, regional, or local economic, business, competitive, market and regulatory conditions, and those listed under the heading "Risk
Factors" and elsewhere in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC"),
which are accessible on the SEC's website at www.sec.gov.
SBC MEDICAL GROUP HOLDINGS INCORPORATED
CONSOLIDATED BALANCE SHEETS
| March 31, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 132,055,823 | $ | 125,044,092 | ||||
| Accounts receivable | 1,633,456 | 1,413,433 | ||||||
| Accounts receivable - related parties | 30,557,912 | 28,846,680 | ||||||
| Accounts receivable | 30,557,912 | 28,846,680 | ||||||
| Inventories | 1,694,765 | 1,494,891 | ||||||
| Finance lease receivables, current - related parties | 7,281,088 | 5,992,585 | ||||||
| Customer loans receivable, current | 8,903,724 | 10,382,537 | ||||||
| Prepaid expenses and other current assets | 32,970,169 | 11,276,802 | ||||||
| Total current assets | 215,096,937 | 184,451,020 | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | 8,523,351 | 8,771,902 | ||||||
| Intangible assets, net | 1,543,779 | 1,590,052 | ||||||
| Long-term investments, net | 3,703,699 | 3,049,972 | ||||||
| Goodwill, net | 4,780,616 | 4,613,784 | ||||||
| Finance lease receivables, non-current - related parties | 10,648,402 | 8,397,582 | ||||||
| Operating lease right-of-use assets | 5,152,104 | 5,267,056 | ||||||
| Finance lease right-of-use assets | 522,055 | - | ||||||
| Deferred tax assets | 2,513,653 | 9,798,071 | ||||||
| Customer loans receivable, non-current | 4,525,883 | 5,023,551 | ||||||
| Long-term prepayments | 1,922,709 | 1,745,801 | ||||||
| Long-term investments in MCs - related parties | 18,691,785 | 17,820,910 | ||||||
| Long-term investments | 18,691,785 | 17,820,910 | ||||||
| Other assets | 6,980,816 | 15,553,453 | ||||||
| Total non-current assets | 69,508,852 | 81,632,134 | ||||||
| Total assets | $ | 284,605,789 | $ | 266,083,154 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 17,854,422 | $ | 13,875,179 | ||||
| Accounts payable - related parties | 1,141,762 | 659,044 | ||||||
| Accounts payable | 1,141,762 | 659,044 | ||||||
| Current portion of long-term loans | 66,950 | 96,824 | ||||||
| Notes and other payables, current - related parties | 1,422,976 | 26,255 | ||||||
| Advances from customers | 525,497 | 820,898 | ||||||
| Advances from customers - related parties | 10,155,134 | 11,739,533 | ||||||
| Advances from customers | 10,155,134 | 11,739,533 | ||||||
| Income tax payable | 1,624,002 | 18,705,851 | ||||||
| Operating lease liabilities, current | 4,131,154 | 4,341,522 | ||||||
| Finance lease liabilities, current | 157,532 | - | ||||||
| Accrued liabilities and other current liabilities | 8,564,250 | 8,103,194 | ||||||
| Due to related party | 2,822,537 | 2,823,590 | ||||||
| Total current liabilities | 48,466,216 | 61,191,890 |
SBC MEDICAL GROUP HOLDINGS INCORPORATED
UNAUDITED CONSOLIDATED BALANCE
SHEETS - (Continued)
| March 31, 2025 | December 31, 2024 | |||||||
| Non-current liabilities: | ||||||||
| Long-term loans | 6,798,045 | 6,502,682 | ||||||
| Notes and other payables, non-current - related parties | 12,413 | 5,334 | ||||||
| Deferred tax liabilities | 346,432 | 926,023 | ||||||
| Operating lease liabilities, non-current | 1,312,819 | 1,241,526 | ||||||
| Finance lease liabilities, non-current | 195,572 | - | ||||||
| Other liabilities | 1,151,857 | 1,193,541 | ||||||
| Total non-current liabilities | 9,817,138 | 9,869,106 | ||||||
| Total liabilities | 58,283,354 | 71,060,996 | ||||||
| Stockholders' equity: | ||||||||
| Preferred stock ($0.0001 par value, 20,000,000 shares authorized; no shares issued and outstanding as of March 31, 2025 and December 31, 2024) | - | - | ||||||
| Common stock ($0.0001 par value, 400,000,000 shares authorized, 103,881,251 and 103,020,816 shares issued, 103,611,251 and 102,750,816 shares outstanding as of March 31, 2025 and December 31, 2024, respectively) | 10,388 | 10,302 | ||||||
| Additional paid-in capital | 62,513,837 | 62,513,923 | ||||||
| Treasury stock (at cost, 270,000 shares as of March 31, 2025 and December 31, 2024) | (2,700,000 | ) | (2,700,000 | ) | ||||
| Retained earnings | 210,965,453 | 189,463,007 | ||||||
| Accumulated other comprehensive loss | (44,343,412 | ) | (54,178,075 | ) | ||||
| Total SBC Medical Group Holdings Incorporated stockholders' equity | 226,446,266 | 195,109,157 | ||||||
| Non-controlling interests | (123,831 | ) | (86,999 | ) | ||||
| Total stockholders' equity | 226,322,43 5 | 195,022,158 | ||||||
| Total liabilities and stockholders' equity | $ | 284,605,789 | $ | 266,083,154 |
The accompanying notes are an integral part of these
unaudited consolidated financial statements.
SBC MEDICAL GROUP HOLDINGS INCORPORATED
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
COMPREHENSIVE INCOME
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues, net - related parties | $ | 45,257,145 | $ | 50,470,207 | ||||
| Revenues, net | 2,071,556 | 4,337,835 | ||||||
| Total revenues, net | 47,328,701 | 54,808,042 | ||||||
| Cost of revenues (including cost of revenues from related parties of $3,456,928 and $1,797,359 for the three months ended March 31, 2025 and 2024, respectively) | 9,595,617 | 15,288,667 | ||||||
| Gross profit | 37,733,084 | 39,519,375 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative expenses | 13,531,010 | 15,058,490 | ||||||
| Total operating expenses | 13,531,010 | 15,058,490 | ||||||
| Income from operations | 24,202,074 | 24,460,885 | ||||||
| Other income (expenses): | ||||||||
| Interest income | 55,333 | 17,689 | ||||||
| Interest expense | (6,207 | ) | (3,008 | ) | ||||
| Other income | 151,328 | 349,681 | ||||||
| Other expenses | (1,697,259 | ) | (1,436,656 | ) | ||||
| Gain on redemption of life insurance policies | 8,746,138 | - | ||||||
| Gain on disposal of subsidiary | - | 3,813,609 | ||||||
| Total other income | 7,249,333 | 2,741,315 | ||||||
| Income before income taxes | 31,451,407 | 27,202,200 | ||||||
| Income tax expense | 9,959,457 | 8,451,984 | ||||||
| Net income | 21,491,950 | 18,750,216 | ||||||
| Less: net loss attributable to non-controlling interests | (10,496 | ) | (7,536 | ) | ||||
| Net income attributable to SBC Medical Group Holdings Incorporated | $ | 21,502,446 | $ | 18,757,752 | ||||
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation adjustment | $ | 9,808,327 | $ | (10,193,852 | ) | |||
| Total comprehensive income | 31,300,27 7 | 8,556,364 | ||||||
| Less: comprehensive loss attributable to non-controlling interests | (36,832 | ) | (92,000 | ) | ||||
| Comprehensive income attributable to SBC Medical Group Holdings Incorporated | $ | 31,337,10 9 | $ | 8,648,364 | ||||
| Net income per share attributable to SBC Medical Group Holdings Incorporated* | ||||||||
| Basic and diluted | $ | 0.21 | $ | 0.20 | ||||
| Weighted average shares outstanding* | ||||||||
| Basic and diluted | 103,276,637 | 94,192,433 |
The accompanying notes are an integral part of these
unaudited consolidated financial statements.
SBC MEDICAL GROUP HOLDINGS INCORPORATED
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | 21,491,950 | $ | 18,750,216 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization expense | 628,304 | 1,018,477 | ||||||
| Non-cash lease expense | 985,184 | 1,052,123 | ||||||
| Provision for credit losses | 25,102 | 152,579 | ||||||
| Fair value change of long-term investments | 140,581 | 938,511 | ||||||
| Gain on disposal of subsidiary | - | (3,813,609 | ) | |||||
| Gain on redemption of life insurance policies | (8,746,138 | ) | - | |||||
| Gain on disposal of property and equipment | (12,375 | ) | - | |||||
| Deferred income taxes | 7,016,227 | (360,582 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (147,925 | ) | (383,254 | ) | ||||
| Accounts receivable - related parties | (295,505 | ) | 4,775,935 | |||||
| Inventories | (124,279 | ) | (34,802 | ) | ||||
| Finance lease receivables - related parties | (2,779,253 | ) | (814,608 | ) | ||||
| Customer loans receivable | 4,501,760 | 2,858,633 | ||||||
| Prepaid expenses and other current assets | (3,150,243 | ) | 610,059 | |||||
| Long-term prepayments | 98,164 | 138,212 | ||||||
| Other assets | 318,351 | (328,818 | ) | |||||
| Accounts payable | 3,235,017 | (8,937,435 | ) | |||||
| Accounts payable - related parties | 441,481 | - | ||||||
| Notes and other payables - related parties | (548,077 | ) | (1,104,968 | ) | ||||
| Advances from customers | (328,791 | ) | (1,451,008 | ) | ||||
| Advances from customers - related parties | (2,114,829 | ) | (161,936 | ) | ||||
| Advances from customers | (2,114,829 | ) | (161,936 | ) | ||||
| Income tax payable | (17,635,239 | ) | (6,552,783 | ) | ||||
| Operating lease liabilities | (1,036,605 | ) | (1,067,196 | ) | ||||
| Accrued liabilities and other current liabilities | 63,764 | (1,604,603 | ) | |||||
| Other liabilities | (98,005 | ) | 3,032 | |||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,928,621 | 3,682,175 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | (253,725 | ) | (702,281 | ) | ||||
| Purchase of convertible note | - | (1,700,000 | ) | |||||
| Prepayments for property and equipment | (501,253 | ) | - | |||||
| Advances to related parties | - | (367,579 | ) | |||||
| Purchase of long-term investments | (635,145 | ) | - | |||||
| Long-term loans to others | (12,783 | ) | (44,865 | ) | ||||
| Repayments from related parties | 70,000 | 215,000 | ||||||
| Repayments from others | 30,680 | 21,422 | ||||||
| Disposal of subsidiary, net of cash disposed of | - | (815,819 | ) | |||||
| Proceeds from disposal of property and equipment | 323,419 | - | ||||||
| NET CASH USED IN INVESTING ACTIVITIES | (978,807 | ) | (3,394,122 | ) |
SBC MEDICAL GROUP HOLDINGS INCORPORATED
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Borrowings from related parties | 15,000 | - | ||||||
| Repayments of long-term loans | (55,873 | ) | (30,354 | ) | ||||
| Repayments of finance lease liabilities | (223,454 | ) | - | |||||
| Repayments to related parties | (16,053 | ) | (9,873 | ) | ||||
| NET CASH USED IN FINANCING ACTIVITIES | (280,380 | ) | (40,227 | ) | ||||
| Effect of exchange rate changes | 6,342,297 | (7,089,208 | ) | |||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 7,011,731 | (6,841,382 | ) | |||||
| CASH AND CASH EQUIVALENTS AS OF THE BEGINNING OF THE PERIOD | 125,044,092 | 103,022,932 | ||||||
| CASH AND CASH EQUIVALENTS AS OF THE END OF THE PERIOD | $ | 132,055,823 | $ | 96,181,550 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
| Cash paid for interest expense | $ | 6,207 | $ | 3,008 | ||||
| Cash paid for income taxes | $ | 20,577,290 | $ | 16,172,526 | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Property and equipment transferred from long-term prepayments | $ | 125,287 | $ | - | ||||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ | 102,599 | $ | - | ||||
| Finance lease right-of-use assets obtained in exchange for finance lease liabilities | $ | 581,129 | $ | - | ||||
| Remeasurement of operating lease liabilities and right-of-use assets due to lease modifications | $ | 358,358 | $ | 1,078,611 | ||||
| Payables to related parties in connection with loan services provided | $ | 1,922,224 | $ | 10,951,451 | ||||
| Issuance of common stock as incentive shares | $ | 86 | $ | - | ||||
| R edemption proceeds receivable on life insurance policies | $ | 17,735,717 | $ | - |
The accompanying notes are an integral part of these
unaudited consolidated financial statements.
OF GAAP TO NON-GAAP FINANCIAL MEASURES
MEDICAL GROUP HOLDINGS INCORPORATED
Reconciliations of GAAP and Non-GAAP Results
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Total revenues, net | $ | 47,328,701 | $ | 54,808,042 | ||||
| Income from operations | 24,202,074 | 24,460,885 | ||||||
| Depreciation and amortization expense | 628,304 | 1,018,477 | ||||||
| EBITDA | 24,830,378 | 25,479,362 | ||||||
| EBITDA margin | 52 | % | 46 | % |
SBC Medical Group Holdings Incorporated
Hikaru Fukui / Head of Investor Relations
E-mail: ir@sbc-holdings.com
Bill Zima / Managing Partner
Email: bill.zima@icrinc.com