SBC Medical Group Holdings Inc. Reports Third Quarter 2024 Financial Results

IRVINE, Calif.--(BUSINESS WIRE)--November 13, 2024-- 

SBC Medical Group Holdings Incorporated ("SBC Medical", or the "Company"), a global owner, operator and provider of management services and products to cosmetic treatment centers, today announced its unaudited financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 Highlights

   -- 
 Total revenues for the three months ended September 30, 2024 were $53 
      million, representing an increase of 12% from $47 million in the same 
      quarter of 2023. 
 
 
   -- 
 Total revenues for the nine months ended September 30, 2024 was $160 
      million, representing an increase of 23% from $131 million in the same 
      period of 2023. 
 
 
   -- 
 Income from operations for the three months ended September 30, 2024 
      was $13 million, representing a decrease by 31% from the same quarter in 
      2023. 
 
          -- 
 This result was impacted by $12.8 million of stock-based 
             compensation expense related to the Company's listing process. 
 
 
 
 
   -- 
 Income from operations for the nine months ended September 30, 2024 was 
      $65.5 million, representing an increase of 40.5% from the same period in 
      2023. 
 
          -- 
 This result is impacted by $12.8 million of stock based 
             compensation expense related to the Company's listing process. 
 
 
 
 
   -- 
 EBITDA1, which is calculated by adding depreciation and amortization 
      expense to income from operations, for the nine months ended September 
      30, 2024 was $68 million, representing an increase of 21% from the same 
      period in 2023. EBITDA margin was 42% for the nine months ended September 
      30, 2024 
 
 
   -- 
 Net income attributable to SBC Medical Group Holdings Incorporated for 
      the three months ended September 30, 2024 was $2 million, compared to $8 
      million in the same quarter of 2023. 
 
 
   -- 
 Net income attributable to SBC Medical Group Holdings Incorporated for 
      the nine months ended September 30, 2024 was $40 million, an increase of 
      60% from $25 million in the same period of 2023. 
 
 
   -- 
 Number of partner clinics was 224 as of September 30, 2024, 
      representing an increase by 24 from September 30, 2023. 
 
 
 
 

(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."

 
 
 
   -- 
 Number of customers in the last twelve months was 4.3 million, 
      representing an year-over-year increase of 13.5%. 
 
 
   -- 
 Return on equity (annualized), which is defined as annualized net 
      income attributable to the Company divided by the average of 
      shareholder's equity as of December 31, 2023 and September 30, 2024, was 
      31% for the nine months ended September 30, 2024, representing a 
      year-over-year increase of one percentage points. 
 
 
   -- 
 Earnings per share (basic), which is defined as net income attributable 
      to the Company divided by weighted average number of outstanding shares, 
      was $0.42 for the nine months ended September 30, 2024, representing a 
      year-over-year increase of 56%. 
 

"Our first earnings release as a publicly listed company marks a significant milestone for SBC Medical. After completing a successful business combination with Pono Capital Two, SBC Medical began trading on Nasdaq under the ticker symbol 'SBC' on September 18, 2024." said Yoshiyuki Aikawa, Chairman and Chief Executive Officer of SBC Medical. "This quarter's strong results, with total revenue reaching USD161 million--an impressive 23% increase year-over-year--and a net income rise of 59%, highlight the positive impact of our strategic initiatives such as restructuring royalty fees and expanding our clinic network. Additionally, with a robust balance sheet supported by USD137 million in cash, we are committed to sustainable growth supported by a clear capital policy. We deeply value our shareholders and our focus on shareholder value will continue through consistent returns with robust business growth, strategic reinvestments, and a strong capital foundation, ensuring that all shareholders, including our minority investors, benefit from our growth and success."

Third Quarter 2024 Financial Results

Total revenues for the nine months ended September 30, 2024 were $160 million, representing an increase of 23% from $131 million in the same period of 2023. Total revenues for the three months ended September 30, 2024 were $53 million, representing an increase of 12% from $47 million in the same quarter of 2023. These increases were mainly because the Company started charging patent and trademark fees to our franchisee clinics, and due to the expansion of numbers of our franchisee clinics Total operating expenses for the nine months ended September 30, 2024 were $56 million, representing an increase of 20% from $47 million in the same period of 2023. Total operating expenses for the three months ended September 30, 2024 were $29 million, representing an increase of 118% from $13 million in the same quarter of 2023. The increases in the total operating expenses were primarily due to listing-related consulting and professional fees, stock-based compensation, and higher office expenses.

EBITDA for the nine months ended September 30, 2024 was $68.4 million, representing an increase of 22% from $56.3 million in the same period of 2023, mainly due to revenue growth but partially offset by listing-related consulting and professional fees, stock-based compensations. EBITDA for the three months ended September 30, 2024 was $14.8 million, representing a decrease of 36% from $23.3 million in the same quarter of 2023, primarily due to listing-related consulting and professional fees, stock-based compensation, and higher office expenses.

Net income for the nine months ended September 30, 2024 was $40.1 million, compared to $24.3 million in the same period of 2023. The increase was attributed mainly to total revenue growth but partially offset by increase of total operating expenses. Net income for the three months ended September 30, 2024 was $2.8 million, compared to $8.1 million for the same quarter in 2023. The decrease was attributable mainly to higher operating expenses.

Cash Flow and Liquidity Highlights

As of September 30, 2024, SBC Medical maintained a strong liquidity position, with cash and cash equivalents totaling $137.4 million, up from $103.0 million as of December 31, 2023. This increase reflects robust cash generation from operating activities, prudent investment management, and disciplined capital allocation strategies.

Operating Cash Flow

Net cash provided by operating activities was $27 million for the nine months ended September 30, 2024, an increase of 23% from $22 million for the same period in 2023. This growth was driven primarily by a $15 million rise in net income, bolstered by stock-based compensation expenses of $12.8 million related to the Company's recent public listing, and an improvement in collection of accounts receivable. These positive factors were partially offset by changes in accounts payable and tax liabilities, which reflect the Company's focus on efficiently managing working capital in a growing operational environment.

Investing Cash Flow

Net cash used in investing activities totaled $5 million during the nine months ended September 30, 2024, a decline from $8 million for the same period in 2023. Key contributor to this decrease included payments made on behalf of a related party of $5.2 million. The Company continues to strategically deploy capital towards high-impact assets that align with its long-term growth objectives.

Financing Cash Flow

Net cash provided by financing activities totaled $11 million during the nine months ended September 30, 2024, an increase from $6 million for the same period in 2023. Key contributor to this increase included proceeds from reverse recapitalization, net of transaction costs $11.7 million. The change reflects the Company's emphasis on self-sustained growth through operating cash flows rather than external financing, with no significant new debt undertaken during the period.

Foreign Currency Impact

SBC Medical's cash flows were impacted by a $0.5 million currency translation adjustment due to the depreciation of the Japanese yen against the U.S. dollar. The Company continues to monitor foreign currency exposure and employ strategies to mitigate risks associated with currency fluctuations.

With a robust cash reserve and sound operational cash flows, SBC Medical is confident in its ability to meet near-term liquidity requirements and to fund future growth initiatives. Management believes that the current cash position, alongside planned operational cash flow, will be sufficient to support the company's business operations and strategic investments for the next 12 months.

About SBC Medical

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November 13, 2024 16:59 ET (21:59 GMT)