SBC Medical Group Holdings Announces First Quarter 2025 Financial Results
IRVINE, Calif.--(BUSINESS WIRE)--May 15, 2025--
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.
First Quarter 2025 Highlights
-- Total revenues were $47 million, representing a 14% year-over-year
decrease.
-- Income from operations was $24 million, representing a 1% year-over-year
decrease.
-- Net Income attributable to SBC Medical Group was $22 million,
representing a 15% year-over-year increase.
-- Earnings per share, which is defined as net income attributable to the
Company divided by the weighted average number of outstanding shares, was
$0.21 for the three months ended March 31, 2025, representing a
year-over-year increase of 5%.
-- EBITDA1, which is calculated by adding depreciation and amortization
expense and impairment loss to income from operations was $25 million,
representing a 3% year-over-year decrease. EBITDA margin1 was 52% for the
first quarter of 2025, compared to 46% for first quarter of 2024.
-- Return on equity, which is defined as net income attributable to the
Company divided by the average of shareholder's equity as of March 31,
2025, was 41% representing a year-over-year decrease of 10 percentage
points.
-- Number of partner clinics was 251 as of March 31, 2025, representing an
increase of 36 clinics from March 31, 2024.
-- Number of customers2 in the last twelve months ended March 31, 2025, was
6.1 million, representing a 14% year-over-year increase.
-- Repeat rate for customers3 who visited franchisee's clinics twice or more
was 71%.
(1) EBITDA 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."
(2) 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
(3) 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
Yoshiyuki 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."
First Quarter 2025 Financial Results
Total 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 Corporations.
Net 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.
EBITDA was $25 million, an 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.
About SBC Medical
SBC 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.
For more information, visit https://sbc-holdings.com/
Use of Non-GAAP Financial Measures
The 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.
The 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.
The 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.
For more information on the non-GAAP financial measures, please see the table captioned "Unaudited Reconciliations of GAAP and Non-GAAP Results."
Forward Looking Statements
This 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
UNAUDITED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2025 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
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
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
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
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, December 31,
2025 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 226,322,435 195,022,158
----------- -----------
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 AND
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 31,300,277 8,556,364
Less: comprehensive loss
attributable to non-controlling
interests (36,832) (92,000)
----------- -----------
Comprehensive income attributable
to SBC Medical Group Holdings
Incorporated $ 31,337,109 $ 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
=========== ===========
* Retrospectively restated for effect of reverse recapitalization on
September 17, 2024.
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 tax expense
(benefit) 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 payable -- 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)
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 -- (Continued)
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 $ --
=========== ===========
Receivable from redemption of
life insurance policies $ 17,735,717 $ --
=========== ===========
The accompanying notes are an integral part of these unaudited consolidated financial statements.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
SBC MEDICAL GROUP HOLDINGS INCORPORATED
Unaudited 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%
--------------- ---------------
View source version on businesswire.com: https://www.businesswire.com/news/home/20250515682953/en/
CONTACT: In Asia:
SBC Medical Group Holdings Incorporated
Hikaru Fukui / Head of Investor Relations
E-mail: ir@sbc-holdings.com
In the US:
ICR LLC
Bill Zima / Managing Partner
Email: bill.zima@icrinc.com
(END) Dow Jones Newswires
May 15, 2025 07:30 ET (11:30 GMT)
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