SOKO Fitness & Spa (SOKF) Posts Record Results for Q32011, Affirms FY Guidance

QualityStocks would like to highlight SOKO Fitness & Spa Group, Inc. (OTCBB: SOKF), an operator of fitness centers, beauty salons, and spas in key cities in China.

In the company’s news yesterday,

SOKO Fitness & Spa Group announced its financial results for the third quarter of fiscal 2011, ended February 28, 2011.

The company reported third-quarter revenue at $10.3 million, an increase of 27 percent over $8.1 in the third quarter of fiscal 2010.

Gross profit increased 21 percent to $7.0 million, compared with $5.8 million in the comparable quarter of 2011. Gross margin was 68.2 percent for the third quarter of fiscal 2011, compared with 71.6 percent for the third quarter of fiscal 2010.

Net income attributable to SOKO improved 11 percent year-over-year to $3.0 million, or $0.14 per diluted share based on diluted shares outstanding of 22.0 million shares, compared with $2.7 million, or $0.15 per diluted share based on diluted shares outstanding of 18.2 million shares in the same period a year ago.

As of February 28, 2011, cash and cash equivalents was $15.7 million.

“This was another record quarter for SOKO as we continued to execute on our business plan, growing our top and bottom-line, expanding our geographic footprint and generating increased cash from operations,” Tong Liu, CEO of SOKO stated in the press release. “We delivered robust growth across our fitness and aesthetic businesses in each of our core geographic markets and achieved meaningful growth in our member and client base, with total spa and salon clients at the end of the third quarter exceeding our goal for the full year, supported by growth in both our newly-opened and more mature facilities. While actively signing new members and clients, we have been able to maintain high retention rates, which contributed to a record backlog of $18.9 million at the end of the third quarter.”

SOKO is affirming its gross revenue guidance for fiscal year 2011, ending May 31, 2011, expecting revenue for the fiscal year to range from $39 million to $42 million, a 30%-40% increase year-over-year.

During the fourth quarter of fiscal 2011, SOKO said it plans to add four new facilities to its portfolio, bringing the total number of new facilities added in fiscal 2011 to 16.

“We believe we have built a strong foundation upon which to continue building our business throughout China. Consistent with our past practice, we plan to continue our expansion focus on strategically targeted, economically stable tier-two markets in which we can build market share and quickly establish brand equity,” Liu stated. “The execution of our growth strategy is proceeding according to plan, with 12 new facilities opened during the first nine months of fiscal 2011, and another 4 under construction or engaged in pre-opening activities. In the fourth quarter and into our fiscal 2012, we will continue to target new strategic markets and identify ways to extend our demographic and geographic footprint, increase our customer base, capture market share and continue to grow our business.”

About QualityStocks

QualityStocks, based in Scottsdale, Arizona, is a free service that collects data from hundreds of Small-Cap and Micro-Cap online Investment Newsletters into one Daily Newsletter Report. QualityStocks is dedicated to assisting emerging public companies with their investor communication efforts and connecting subscribers with companies that have huge potential to succeed in the short and long-term future.

To sign up for “The QualityStocks Daily Newsletter” please visit www.QualityStocks.net

Please see disclaimer on QualityStocks website: http://Disclaimer.QualityStocks.net

Forward-Looking Statement:

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.