Ever-Glory Reports Third Quarter 2009 Financial Results

-- 3Q09 Gross Margin Increased 420 Basis Points YoY to 18.6% --

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-- 3Q09 Net Income Increased 200.3% to $1.9 million or $0.14 per diluted share --

NANJING, China, Nov. 9 /PRNewswire-Asia-FirstCall/ -- Ever-Glory International Group, Inc. (the "Company," "Ever-Glory") (NYSE Amex: EVK), a leading apparel supply chain manager and retailer in China, today reported its financial results for the third quarter ended September 30, 2009.

During the third quarter 2009, net sales decreased 21.8% to $24.9 million from $31.9 million in the third quarter of 2008. This decrease was primarily attributable to decreased sales orders in the Company's wholesale business because of the global economic slowdown.

Retail sales from LA GO GO, the Company's branded retail division, increased to $2.6 million, or 152.8%, compared to $1.0 million in the third quarter of 2008.

"The third quarter of 2009 proved to be a challenging quarter in our wholesale business," commented Mr. Edward Yihua Kang, Chairman of the Board and Chief Executive Officer of Ever-Glory. "Our wholesale business experienced decreased sales. The majority of this decrease was due to our decision in the second quarter to halt orders with several customers as we couldn't be certain of their ability to maintain timely payments thus affecting year over year comparisons for the remainder of 2009. Our top priority in this difficult economy is to protect Ever-Glory, its financial position and its cash flow. We believe we are taking the appropriate steps to protect our finances and provide Ever-Glory with a more stable customer base.

"Our retail business remains strong and we recorded over $2.6 million of retail sales in the quarter versus approximately $1.0 million in the third quarter of last year. In the third quarter of 2009, we opened 25 new LA GO GO stores, closed one store and as of September 30, 2009 we had 154 LA GO GO stores in operation in total. Also encouraging is that our retail sales per square foot per month increased approximately 15% compared to the same period of last year."

In the third quarter of 2009, gross profit increased 0.9% to $4.63 million from $4.59 million in the third quarter of 2008. Gross margin increased 420 basis points to 18.6% in the third quarter of 2009, compared to 14.4% in the third quarter of 2008 largely because we decreased lower margin orders as a continued effort to pursue higher added value operations in our wholesale business and same store sales increased during the quarter ended September 30, 2009 in our retail business.

Selling expenses increased 94.7% to $1.1 million in the third quarter of 2009 from $564 thousand in the third quarter of 2008. This increase was primarily due to increased retail staff, renovation and retail marketing expenses to promote LA GO GO. General and administrative expenses decreased 7.2% to $1.6 million from $1.7 million in the third quarter of 2008. Although we increased payroll for additional management, design and marketing staff as a result of our business expansion, total G&A expenses decreased because

non-occurrence of the expenses related to our AMEX listing which occurred in the third quarter of 2008.

Income from operations for the third quarter of 2009 decreased 15.8% to $2.0 million, or 7.9% of total sales, compared to $2.3 million, or 7.3% of sales, in the third quarter of 2008.

Net income for the third quarter of 2009 increased 200.3% to $1.9 million or $0.14 per diluted share from $643 thousand, or $0.05 per diluted share in the third quarter of 2008.

Balance Sheet and Cash Flow

As of September 30, 2009, the Company had $3.6 million of cash and cash equivalents, compared to $1.4 million as of December 31, 2008; Ever-Glory had working capital of approximately $18.5 million as of September 30, 2009. The Company had bank loans of $5.4 million as of September 30, 2009.

Business Outlook

For full year 2009, the Company anticipates total net sales of $103 million to $118 million and net income of $5.8 million to $6.5 million. The full year revenue forecast is comprised of $90 million to $100 million in expected wholesale revenue and $13 million to $18 million in expected revenue from retail.

Conference Call

The Company will hold a conference call today at 8:30 a.m. Eastern Time which will be hosted by Edward Yihua Kang, Chairman of the Board, President, and CEO, Yan Guo, Chief Financial Officer. Listeners can access the conference call by dialing #1-913-981-4900. The conference call will also be broadcast live over the Internet and can be accessed at the Company's web site at the following URL: http://www.everglorygroup.com .

A replay of the call will be available from November 9, 2009 through November 16, 2009 by calling #1-719-457-0820; pin number: 3006456.

About Ever-Glory International Group, Inc.

Based in Nanjing, China, Ever-Glory International Group, Inc. is a leading apparel supply chain manager and retailer in China. Ever-Glory is the first Chinese apparel company listed on the American Stock Exchange (now called NYSE Amex), and has a focus on middle-to-high grade casual wear, outerwear, and sportswear brands. The Company maintains global strategic partnerships in Europe, the United States, Japan and China, conducting business with several well-known brands and retail chain stores. In addition, Ever-Glory operates its own domestic chain of retail stores known as "LA GO GO."

Safe Harbor Statement

Certain statements in this release and other written or oral statements made by or on behalf of the Company are "forward looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future are forward-looking statements within the meaning of these laws. The forward looking statements are subject to a number of risks and uncertainties including market acceptance of the Company's products and projects, the Company's continued access to capital, currency exchange rate fluctuation and other risks and uncertainties. The actual results the Company achieves may differ materially from those contemplated by any forward-looking statements due to such risks and uncertainties. These statements are based on our current expectations and speak only as of the date of such statements. Readers should carefully review the risks and uncertainties described in the Company's latest Annual Report on Form 10-K and other documents that the Company files from time to time with the U.S. Securities and Exchange Commission.

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

(UNAUDITED)

Three months ended Nine months ended

September 30, September 30,

2009 2008 2009 2008

NET SALES

Related parties $66,221 $17,582 $75,572 $510,145

Third parties 24,870,500 31,867,994 66,494,465 75,191,036

Total net sales 24,936,721 31,885,576 66,570,037 75,701,181

COST OF SALES

Related parties 38,281 10,989 47,294 472,373

Third parties 20,264,735 27,284,216 52,667,322 62,563,564

Total cost of

sales 20,303,016 27,295,205 52,714,616 63,035,937

GROSS PROFIT 4,633,705 4,590,371 13,855,421 12,665,244

OPERATING EXPENSES

Selling expenses 1,097,840 563,971 2,903,655 1,210,063

General and

administrative

expenses 1,562,382 1,683,713 5,707,786 4,918,696

Total Operating

Expenses 2,660,222 2,247,684 8,611,441 6,128,759

INCOME FROM OPERATIONS 1,973,483 2,342,687 5,243,980 6,536,485

OTHER INCOME (EXPENSES)

Interest income 180,089 41,052 445,117 121,616

Interest expense (94,016) (1,468,592) (332,900) (2,677,546)

Other income 269 571 45,252 53,656

Total Other Income

(Expenses) 86,342 (1,426,969) 157,469 (2,502,274)

INCOME BEFORE INCOME

TAX EXPENSE 2,059,825 915,718 5,401,449 4,034,211

INCOME TAX EXPENSE (130,479) (273,203) (692,206) (841,850)

NET INCOME 1,929,346 642,515 4,709,243 3,192,361

ADD: NET LOSS

ATTRIBUTABLE TO THE

NONCONTROLLING INTEREST 7,552 4,666 25,011 1,417

NET INCOME ATTRIBUTABLE

TO THE COMPANY $1,936,898 $647,181 $4,734,254 $3,193,778

NET INCOME $1,929,346 $642,515 $4,709,243 $3,192,361

Foreign currency

translation gain

(loss) 46,364 107,468 (36,947) 1,818,706

COMPREHENSIVE INCOME 1,975,710 749,983 4,672,296 5,011,067

COMPREHENSIVE (INCOME)

LOSS ATTRIBUTABLE TO

THE NONCONTROLLING

INTEREST (6,752) 34,441 8,749 11,419

COMPREHENSIVE INCOME

ATTRIBUTABLE TO

THE COMPANY $1,968,958 $784,424 $4,681,045 $5,022,486

NET INCOME PER SHARE

Attributable to the

Company's common

stockholders

Basic $0.14 $0.05 $0.35 $0.27

Diluted $0.14 $0.05 $0.35 $0.27

Weighted average number

of shares outstanding

Basic 13,558,326 11,914,825 13,546,116 11,692,604

Diluted 13,558,326 12,002,908 13,546,116 11,715,332

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2009 (UNAUDITED) AND DECEMBER 31, 2008

ASSETS

September 30, December 31,

2009 2008

(unaudited)

CURRENT ASSETS

Cash and cash equivalents $3,561,116 $1,445,363

Accounts receivable 14,590,133 9,485,338

Inventories 7,232,455 3,735,227

Value added tax receivable 802,120 --

Other receivables and prepaid

expenses 480,667 945,191

Advances on inventory purchases 381,850 288,256

Amounts due from related party 10,475,672 11,565,574

Total Current Assets 37,524,013 27,464,949

LAND USE RIGHT, NET 2,805,175 2,854,508

PROPERTY AND EQUIPMENT, NET 12,574,798 12,494,452

INVESTMENT AT COST 1,467,000 1,467,000

TOTAL ASSETS $54,370,986 $44,280,909

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Bank loans $5,398,560 $6,542,820

Loan from related party - short term 500,000 --

Accounts payable 9,682,539 3,620,543

Accounts payable and other

Payables - related parties 739,437 754,589

Other payables and accrued

liabilities 1,943,983 1,683,977

Value added and other taxes payable 371,655 368,807

Income tax payable 118,921 257,946

Deferred tax liabilities 304,670 80,009

Total Current Liabilities 19,059,765 13,308,691

LONG-TERM LIABILITIES

Loan from related party 2,247,879 2,660,085

TOTAL LIABILITIES 21,307,644 15,968,776

COMMITMENTS AND CONTINGENCIES

EQUITY

Stockholders' equity of the Company

Preferred stock ($.001 par value,

authorized 5,000,000 shares,

no shares issued and outstanding) -- --

Common stock ($.001 par value,

authorized 50,000,000 shares,

13,560,240 and 12,373,567 shares

issued and outstanding as of

September 30, 2009 and December 31,

2008, respectively) 13,560 12,374

Additional paid-in capital 4,592,971 4,549,004

Retained earnings 20,541,793 15,807,539

Statutory reserve 3,437,379 3,437,379

Accumulated other comprehensive

income 3,919,913 3,956,860

Total Stockholders' Equity of the

Company 32,505,616 27,763,156

Noncontrolling interest 557,726 548,977

Total Equity 33,063,342 28,312,133

TOTAL LIABILITIES AND EQUITY $54,370,986 $44,280,909

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (UNAUDITED)

2009 2008

CASH FLOWS FROM OPERATING ACTIVITIES

Net income $4,709,243 $3,192,361

Adjustments to reconcile net

income to cash provided

by operating activities:

Depreciation and amortization 1,512,089 714,446

Deferred income tax 224,493 --

Amortization of discount on

convertible notes -- 1,934,026

Amortization of deferred

financing costs -- 318,196

Stock issued for interest -- 2,155

Stock-based compensation 22,181 12,855

Changes in operating assets and

liabilities

Accounts receivable (5,100,967) (3,306,125)

Accounts receivable - related

parties 153,420

Inventories (3,494,605) (597,330)

Value added tax receivable (801,519)

Other receivables and prepaid

expenses (123,094) (631,466)

Other receivable - related

parties -- (37,823)

Advances on inventory purchases (93,524) (332,988)

Amounts due from related party 1,088,634 (4,059,141)

Accounts payable 6,057,452 4,325,070

Accounts payable and other

payables - related parties 72,399 149,688

Other payables and accrued

liabilities 259,657 435,963

Value added and other taxes

payable 2,845 181,056

Income tax payable (138,920) 268,334

Net cash provided by operating

activities 4,196,364 2,722,697

CASH FLOWS FROM INVESTING ACTIVITIES

Investment in La Chapelle -- (1,397,700)

Purchase of property and equipment (984,346) (800,669)

Proceeds from sale of equipment 28,537 37,019

Net cash used in investing

activities (955,809) (2,161,350)

CASH FLOWS FROM FINANCING ACTIVITIES

Contribution from minority

shareholders -- 553,040

Proceeds from bank loans 11,991,062 11,354,904

Repayment of bank loans (13,134,464) (10,695,402)

Repayment of long term loan -- (1,844,164)

Exercise of warrants -- 219,635

Net cash used in financing

activities (1,143,402) (411,987)

EFFECT OF EXCHANGE RATE CHANGES ON

CASH 18,600 91,449

NET INCREASE IN CASH AND CASH

EQUIVALENTS 2,115,753 240,809

CASH AND CASH EQUIVALENTS AT

BEGINNING OF PERIOD 1,445,363 641,739

CASH AND CASH EQUIVALENTS AT END OF

PERIOD $3,561,116 $882,548

SUPPLEMENTAL DISCLOSURE OF CASH FLOW

INFORMATION:

Cash paid during the period for:

Interest expense $245,105 $295,562

Income taxes $606,622 $573,557