Company Earns $.06 per Share for the Year 2007 vs. $.01 in 2006
Net Revenue for 2007 was $110,922,809 vs. $56,758,688 in 2006
Net Income for 2007 was $3,315,544 vs. $468,670 in 2006
Net Revenue Increases 95.4% Percent from Fiscal Year 2006
ONTARIO, Calif., March 31, 2008 (PRIME NEWSWIRE) -- SOYO Group Inc. (OTCBB: SOYO) today announced financial results for the period ending December 31, 2007.
The Company reported net revenues of $110,922,809 for the year ending December 31, 2007, as compared to $56,758,688 for the year ending December 31, 2006: an increase of 95.4%. The Company also reported net income of $3,315,544 or $.06 per share for the year 2007, compared to $468,670, or $.01 per share for the year 2006. Gross margin was $14,421,335, or 13.0%, in 2007, as compared to $9,224,439, or 16.3%, in 2006.
"2007 was the best year in SOYO's history, with record numbers across the board," Ming Chok, CEO of SOYO said. "This is a very exciting time for us. We increased our revenues 95% from 2006, we had our most profitable year ever and we established new brands. With the SOYO and Le Vello brands selling well, the reception our products received at CES in January and the launch of the Honeywell Brand of Consumer Electronics products, 2008 is already off to a great start, and is poised to be an even better year. Our entire team worked very hard to make 2007 a successful year for us, and we are all very pleased with these record financial results."
In the press release and 8-K dated January 16, 2008, the Company stated that they expected 2007 net income to be $4,000,000, or $.07 per share. The Company reported actual net income of $3,315,544, or $.06 per share, and $.06 per share on a fully diluted basis. The Company's gross margins, income from operations, and operating expenses exceeded management's expectations in 2007. The Company's non cash expenses for share based compensation due to stock options granted to employees, consultants and directors were higher than management's forecasts. The total non cash expense for share based compensation exceeded $2,200,000 for 2007.
The Company will hold a conference call today at 3pm Pacific Time (6pm Eastern) to discuss these financial results. Information for the call is as follows:
Date/Time: Monday, March 31, 2008 3pm Pacific (6pm Eastern)
US/Canada Toll-Free Call-in Number: (866) 830-4434
International Toll-Free Call-in Number: (706) 679-4957
Pass code: # 39997625
About SOYO Inc.
SOYO Inc. is an innovative provider of consumer electronics such as LCD Monitors, LCD Televisions, Bluetooth, Portable Storage, LCD Furniture and broadband telecommunications products and services. Headquartered in Ontario, California, with additional sales offices in South America, SOYO sells its products through an extensive network of authorized distributors, resellers, system integrators, VARs, retailers, mail-order catalogs and e-tailers. Products are sold under the SOYO, Dragon, Onyx, Dymond, Honeywell, Le Vello, and Prive brand names. For more information, please visit http://www.soyo.com. For information on the Honeywell Consumer Electronics product lines, please visit www.honeywellce.com.
SOYO Group, Inc. and Subsidiary
Consolidated Balance Sheets
December 31,
2007 2006
restated
ASSETS
Current Assets
Cash and cash equivalents $ 1,848,249 $ 1,501,040
Accounts receivable, net of allowance
for doubtful accounts of $783,573 and
$388,958 at December 31, 2007 and 2006,
respectively 27,123,985 16,467,135
Inventories, net of allowance for
inventory obsolescence of $88,114 and
$168,600 as of December 31, 2007 and
2006, respectively 12,221,265 7,792,621
Prepaid expenses 187,749 36,633
Deferred income tax assets - current 544,688 --
Deposits 8,808,408 243,095
Total current assets 50,734,344 26,040,524
Investment in 247MGI 400,000 --
Property and equipment 316,287 711,015
Less: accumulated depreciation and
amortization (141,613) (159,300)
174,674 551,715
------------
Deferred income tax - noncurrent 658,312 --
Total Assets $51,967,330 $26,592,239
LIABILITIES
Current Liabilities
Accounts payable $14,336,196 $16,073,617
Accrued liabilities 789,526 519,457
Advances from officers, directors and
major stockholders -- 100,000
Receivables sold with recourse -- 3,588,403
Commercial loans due to UCB 27,824,490 --
Income tax payable 889,518 53,000
Total current liabilities 43,839,730 20,334,477
Long term payable -- 3,735,198
Total liabilities 43,839,730 24,069,675
EQUITY
Class B cumulative convertible Preferred
stock, $0.001 par value, authorized -
10,000,000 shares, issued and
outstanding - 2,614,195 shares 2,187,165 1,918,974
Preferred stock backup withholding (230,402) (149,945)
Common stock, $0.001 par value
Authorized - 75,000,000 shares, issued
and outstanding - 52,004,656 shares
(49,025,511 shares - 2006) 52,005 49,026
Additional paid-in capital 20,233,500 17,866,531
Accumulated deficit (14,114,668) (17,162,022)
Total shareholders' equity 8,127,600 2,522,564
Total Liabilities and Shareholders' Equity $51,967,330 $26,592,239
See accompanying notes to consolidated financial statements
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Operations
Year Ended December 31,
2007 2006 2005
restated
Net revenues $110,922,809 $ 56,758,688 $ 38,263,032
Cost of sales 96,501,474 47,534,249 34,905,874
Prior years' purchase
discounts and allowances
settled in 2005 -- -- (1,335,812)
Cost of revenues - net 96,501,474 47,534,249 33,570,062
Gross margin 14,421,335 9,224,439 4,692,970
Costs and expenses:
Sales and marketing 1,544,042 1,143,475 911,039
General and administrative 7,922,210 5,610,810 3,659,338
Bad debts 385,387 907,065 34,513
Adjustment of allowance -- -- (462,234)
Depreciation and amortization 91,818 43,818 35,394
Total cost and expenses 9,943,457 7,705,168 4,178,050
Income (loss) from
operations 4,477,878 1,519,271 514,290
Other income (expenses):
Interest income 85,144 10,561 5,301
Interest expense (1,364,059) (901,900) (129,567)
Other income (expenses) (87,705) (106,262) 150,456
Loss on sale of VOIP
division (159,714) -- --
Other income (expenses)
- net (1,526,334) (997,601) 26,190
Income before provision
(benefit) for income taxes 2,951,544 521,670 541,110
Provision (benefit) for income taxes
Current income tax (839,000) (53,000) (800)
Deferred income tax 1,203,000 -- --
Net income 3,315,544 468,670 540,310
Less: Dividends on
Convertible Preferred Stock (268,191) (216,488) (1,173,753)
Net income (loss) attributable
to common shareholders $ 3,047,353 $ 252,182 $ (633,443)
Net (loss) per common share
- basic and diluted $0.06/$0.06 $0.01/$0.01 ($0.01)/($0.01)
----------- ----------- -------------
Weighted average number of 49,354,963/ 49,025,511/ 48,511,681/
shares of common stock ---------- ---------- ----------
outstanding - basic and
diluted 53,594,176 59,786,042 52,868,673
---------- ---------- ----------
See accompanying notes to consolidated financial statements.
SOYO Group, Inc. and Subsidiary
Consolidated Statements of Cash Flows
Years Ended December 31,
2007 2006 2005
restated
OPERATING ACTIVITIES
Net Income $3,315,544 468,670 $ 540,310
Adjustments to reconcile net
income (loss) to net cash provided
by (used in) operating activities:
Depreciation 91,818 43,818 35,394
Provision for doubtful accounts
and recovery of AR written off 394,615 907,065 34,513
Provision for inventory
obsolescence 80,486 -- --
Conversion of accounts payable
to long-term debt -- 3,735,198 --
Stock compensation for
employees 1,124,157 506,222 --
Stock compensation paid for
professional services 803,596 134,915 --
Stock issued as compensation
for directors and others 307,000 -- --
Forfeitures of non-qualified
stock options (100,880) -- --
Loss on sale of VOIP equipment
and inventories 159,714 -- --
Changes in operating assets
and liabilities:
(Increase) decrease in:
Accounts receivable (11,051,465) (10,095,680) (5,236,151)
Inventories - net (4,733,348) 198,409 (4,128,119)
Prepaid expenses (151,116) (15,649) 51,432
Deferred income tax assets
- current & non-current (1,203,000) -- --
Deposits (8,565,313) (206,175) (2,109)
Increase (decrease) in:
Accounts payable trade & others (1,737,421) 2,096,038 8,017,326
Accrued liabilities 270,069 (767,651) 509,316
Advances from Officers, Directors
and Major Stockholders (100,000) -- --
Receivables sold with recourse (3,588,403) -- --
Commercial loans due to UCB 27,824,490 -- --
Income tax payable 836,518 53,000 --
Net cash provided by (used in)
operating activities 3,977,061 (2,941,820) (178,088)
INVESTING ACTIVITIES
Purchase of property and
equipment (50,272) (48,891) (621,970)
Disposal of Fixed Assets -- 205,000 --
Net cash Supplied (used) in
investing activities (50,272) 156,109 (621,970)
FINANCING ACTIVITIES
Advances from officer, directors
and major shareholder -- -- 165,000
Proceeds from accounts receivable
discounting -- 15,611,928 --
Repayments of accounts receivable
discounting -- (12,023,525) --
Repayment of advances from officer,
director and major shareholder -- (65,000) (240,000)
Repayment of long- term debt (3,735,198) -- 500,000
Proceeds from employees' exercise of
stock options 236,075 -- --
Payment of backup withholding -- -- --
taxes on accreted dividends on
preferred stock (80,457) (64,946) (84,999)
Net cash provided by financing
activities (3,579,580) 3,458,457 340,001
CASH AND CASH EQUIVALENTS:
Net increase (decrease) 347,209 672,746 (460,057)
At beginning of year 1,501,040 828,294 1,288,351
At end of year 1,848,249 1,501,040 828,294
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid for interest 1,364,059 901,900 97,783
Cash paid for income taxes 26,696 20,310 800
NON-CASH INVESTING AND FINANCING
ACTIVITIES
Disposal of VOIP equipment and
inventory assets in exchange
For investment in common stock
of 247 MGI 400,000 -- --
Settlement of business loan of
$913,750 and accrued interest of
$51,251 through issuance of
common stock -- -- 965,001
Settlement of accounts payable
through issuance of common stock -- -- 3,614,419
Conversion of Class A preferred
stock to common stock -- -- 1,000
Accretion of discount on Class B
preferred stock 268,191 216,488 174,753
Deemed dividend on Class A
preferred stock -- -- 999,000
Noncash dividend on Class B
preferred stock -- -- --
"Safe Harbor" Statement
This release contains certain statements that may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. The words "plan," "confident that," "believe," "scheduled," "expect," or "intend to," and similar conditional expressions, are intended to identify forward-looking statements. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, the availability of components and successful production of the company's products, successful performance of internal plans, the impact of competitive services and pricing, general economic risks and uncertainties, and various other information detailed from time to time in the company's filings with the United States Securities and Exchange Commission. The company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Please refer to the company's filings at www.sec.gov.