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SOKO Fitness & Spa Group Announces Record Financial Resu

文章出处:K8 发表时间:2019-01-09

HARBIN, China, Sept. 2 /PRNewswire-Asia-FirstCall/ -- SOKO Fitness & Spa Group, Inc. (OTC Bulletin Board: SOKF), a leading operator of fitness centers and beauty salons and spas in Northeast China, today announced record financial results for the fiscal year ended May 31, 2009.

Fiscal 2009 highlights:

-- Revenue increased 40% year-over-year to $19.6 million

-- Net profit increased 36% year-over-year to $7.0 million

-- Gross margin was 66%, compared to 64% in the prior year period

-- Operating income increased 31% year-over-year to $7.1 million

-- Fitness membership increased 30% year-over-year to 13,000

-- Beauty salon & spa customers increased 95% year-over-year to 19,500

Results of Operations

Compared to fiscal year 2008, beauty and spa revenues increased by 29.35%. The increase was driven by the increasing number of clients and the opening of new facilities. Fitness and yoga revenues increased by 98.70%. These results were driven by marketing efforts to an increase in memberships, and the acquisition of Yoga Wave and increased revenues associated with add-on services provided to members. Other revenues, which consist of beauty school tuition and related student costs, increased by 79.25%, driven by the increasing number of students and new courses.

SOKO achieved gross profits of $12.98 million for the year ended May 31, 2009, compared to $8.95 million for the previous year, an increase of 45% or approximately $4.03 million. As a percentage of revenues, gross profit margin was 66% for fiscal 2009 compared to 64% in fiscal 2008. The margin improvement was mainly driven by the shift from lower margin services and product sales to higher margin services during the year.

Operating expenses increased 66.9% year over year. The increase in operating expenses was attributable to the increase in amortization of leasehold improvement, increased rental expenses for new and existing facilities and other expenses relating to our growth in sales.

Net income for the year ended May 31, 2009 increased by approximately $1.8 million to $7.0 million as compared to $5.2 million for the previous year. The 36% net income increase year over year was mainly attributable to an increase in revenues and the Company's ongoing efforts to cut costs.

Basic earnings per share were $0.41 for 2009 as compared to $0.45 in the previous year. Fully diluted earnings per share were $0.41 for 2009 as compared to $0.43 in the pervious year. The decline in earnings per share was attributable to the dilution from the public offering in fiscal 2008.

During fiscal 2009, SOKO generated cash flow from operations of $9.39 million, an increase of 93.5% from fiscal 2008. The Company used its cash flow from operations for capital expenditures to renovate existing facilities and open/acquire new ones.

"I'm very proud that we achieved another record year despite the downturn of macro economy," said Mr. Liu Tong, Chairman, President & CEO of SOKO. "In 2009, we continued to strengthen our leading position in fitness center and beauty salon and spa operations in Northeast China. Our rapid growth resulted from the expansion of our branches and increased consumption per client due to innovative programs we developed. We will keep working on new branch expansion and new value-added programs next year."

Earnings Call

SOKO's Chief Executive Officer Liu Tong, Chief Financial Officer Yu Xia, and Corporate Secretary Jiang Judy will host a conference call for shareholders to discuss FY2009 annual earnings results at 9 am EDT on September 2, 2009.

Dial-In Number(s):

* US/Canada Toll Free Dial-in #: (866)811-8933

* Int'l/Local Dial-In #: (706)645-9773

Conference ID #: 28156610

NOTE: In order to join this conference call, all speakers and participants will be required to provide the Conference ID Number listed above.

About SOKO Fitness & Spa Group, Inc.:

SOKO Fitness & Spa Group, Inc., an OTCBB listed company (SOKF.OB), is a leading operator of fitness centers and beauty salons and spas in Northeast China. The Company provides programs, services, and products uniquely combined with exercise, education, and nutrition to help their members lead a healthy life and achieve their fitness goals. For further information, please go to http://www.sokofitness.com .

Safe Harbor Statement

This press release may contain forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words or phrases such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this press release contain forward-looking statements. Statements that are not historical facts, including statements about SOKO's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. SOKO does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

SOKO FITNESS & SPA GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(IN US DOLLARS)

AS OF MAY 31,

2009 2008

(RESTATED)

ASSETS

Current assets:

Cash & cash equivalents $ 1,907,640 $ 1,563,709

Restricted cash 7,233 --

Accounts receivable, net 110,541 682,694

Inventories 1,391,302 1,048,788

Advances to suppliers 993,084 1,467,861

Employee advance 54,783 249,900

Prepaid expense 146,959 340,993

Total Current Assets 4,611,542 5,353,945

Property, plant and equipment, net of

accumulated depreciation 19,674,394 12,782,918

Other Assets

Security Deposit 47,853 --

Deferred Rent 589,188 --

Deposit to suppliers 1,464,530 720,461

Investment advance 399,750 1,152,738

Goodwill 2,525,778 1,505,710

Total Other Assets 5,027,099 3,378,909

Total Assets 29,313,035 21,515,772

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Short-term loans 2,196,795 2,547,244

Accounts payable, accrued expenses

and other payable 471,457 1,020,232

Unearned revenue 1,909,755 514,965

Taxes payable 360,229 339,555

Contingent Liability 200,000 --

Total Current Liabilities 5,138,236 4,421,996

Stockholders' Equity

Preferred Stock, $.001 par value;

10,000,000 shares authorized;

- 0 - shares issued and outstanding

at May 31,2009 and 2008 -- --

Common stock, $0.001 Par value;

500,000,000 shares authorized;

17,000,000 shares issued and

outstanding at May 31, 2009 and

2008 17,000 17,000

Additional paid-in-capital 2,139,786 2,091,165

Additional paid-in-capital - Warrants 372,914 372,914

Accumulated other comprehensive income 1,910,752 1,625,829

Retained earnings 19,688,064 12,657,564

Total Stockholders' Equity 24,128,516 16,764,472

Noncontrolling interest 46,283 329,304

Total Equity 24,174,799 17,093,776

Total Liabilities and Stockholders'

Equity $ 29,313,035 $ 21,515,772

SOKO FITNESS & SPA GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(IN US DOLLAR)

FOR THE YEARS ENDED MAY 31,

2009 2008

(RESTATED)

Net Sales $ 19,569,108 $ 13,963,130

Cost of Sales (6,591,906) (5,010,643)

Gross Profit 12,977,202 8,952,487

Selling, General and

Administrative Expenses: 5,902,059 3,536,547

Operating income 7,075,143 5,415,940

Other Income and Expenses

Interest expenses (66,121) (49,177)

Other income 47,012 2,357

Penalty for investors'

liquidated damages (200,000) --

Other expenses (70,731) (10,328)

Total Other Income and (Expense) (289,840) (57,148)

Income Before Income Taxes 6,785,303 5,358,792

Provision for Income Taxes 42,667 74,381

Net Income 6,742,636 5,284,411

Less: net income (loss)

attributable to the

noncontrolling interest (287,865) 108,481

Net Income Attributable to SOKO

Fitness & Spa Group, Inc. $ 7,030,500 $ 5,175,930

Other Comprehensive Income

Foreign currency translation

adjustment 284,923 1,217,693

Comprehensive Income $ 7,315,423 $ 6,393,622

Basic and Diluted Income per

common share

Basic $ 0.41 $ 0.45

Diluted $ 0.41 $ 0.43

Weighted average common share

outstanding

Basic 17,000,000 11,601,781

Diluted 17,297,931 11,903,589

SOKO FITNESS & SPA GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN US DOLLARS)

FOR THE YEARS ENDED MAY 31,

2009 2008

(RESTATED)

Cash Flows From Operating Activities:

Net income $ 7,030,500 $ 5,175,930

Adjustments to reconcile net income

to net cash provided by operating

activities:

Stock based compensation 48,621 --

Depreciation 1,719,398 1,016,855

Minority interest (287,865) 108,481

Liquidated damage penalty 200,000 --

Loss from disposal of fixed

assets 54,809 --

Rent expense converted from

leasehold improvement 163,229 --

Changes in operating assets and

liabilities:

Restricted cash (7,219) --

Accounts receivable 605,326 (270,326)

Inventories (302,677) (584,845)

Advances to suppliers 503,705 (279,736)

Employee advance 198,831 (163,600)

Prepaid expense 265,225 (254,681)

Security deposit (47,761) --

Deferred Rent (588,061) --

Deposit to suppliers (730,864) 6,816

Accounts payable 7,283 (33,815)

Unearned revenue 1,367,451 6,948

Taxes payable 15,018 203,532

Accrued expenses and other payables (829,923) (82,086)

Cash provided by operating

activities 9,385,023 4,849,473

Cash Flows From Investing Activities:

Addition in construction in

progress (5,312,845) (2,665,759)

Purchase of property and

equipment (3,061,979) (3,293,245)

Proceeds received from disposal

of fixed assets 1,316

Investment in subsidiary -- (1,687,408)

Cash acquired from subsidiaries 97,594 124,447

Investment advance (399,750) (1,090,545)

Cash used in investing activities (8,675,665) (8,612,510)

Cash Flows From Financing Activities:

Proceeds from capital contribution -- 1,000,000

Net proceeds from issuance of

common stock -- 1,327,500

Proceeds from short-term loan 2,196,795 2,409,815

Repayment of short-term loan (2,588,227) --

Cash provided by (used in)

financing activities (391,432) 4,737,315

Effect of exchange rate changes on cash

and cash equivalents 26,005 133,316

Increase in cash and cash equivalents 343,931 1,107,594

Cash and Cash Equivalents - Beginning of

the year 1,563,709 456,115

Cash and Cash Equivalents - Ending of

the year $ 1,907,640 $ 1,563,709

Supplemental disclosures of cash flow

information:

Interest paid $ 66,121 $ 49,042

Income Taxes paid $ 74,135 $ 9,427

Non-cash investing and financing

activities:

Option issued for directors $ 109,898 $ --

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