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Ever-Glory Fourth Quarter 2021 Financial Results

Ever-Glory International Group, Inc.
2022-04-13 17:56 3897

NEW YORK, April 13, 2022 /PRNewswire/ -- Ever-Glory International Group, Inc. (the "Company" or "Ever-Glory") (NASDAQ: EVK), a retailer of branded fashion apparel and a leading global apparel supply chain solution provider, reported its financial results today for the full year ended December 31, 2021.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "During the full year of 2021, we maintained our focus on developing the retail business through our multi-brand strategy and store network optimization initiative, while improving our wholesale business by upgrading customer portfolio and enhancing our account receivables."

"During the full year of 2021, our retail brands continue to attract new customers and retain existing customers by focusing on design, quality and value," Mr. Kang continued. "Following the remodeling or relocation of 137 stores during 2021, we operated a nationwide network of 880 stores as of December 31, 2021."

"Looking at our wholesale business, we maintained focus on upgrading customer portfolio to reduce credit risk and improve margin in light of weak micro-environment and enhancing our account receivables. Going forward, we'll implement a stricter client evaluation system and remain diligent in our account receivables collection. We believe the enduring strength of our wholesale business will support its long-term profitability," Mr. Kang concluded.

Mr. Jason Jiansong Wang, Chief Financial Officer of Ever-Glory, added, "The full year results are coupled with our ability to increase operating leverage. Going forward, we remain confidence in the long-term prospects of our business and we will continue implementing our margin enhancement and cost control measures to further strengthen the profitability of our business."

Full year 2021 Financial Results 

Total sales for the full year of 2021 were $331.0 million, an increase of 23.8% from $267.4 million in the full year of 2020. This increase was primarily driven by a 57.8% increase in our wholesale business partially offset by a 2.7% decrease in retail business.

Sales for the Company's branded fashion apparel retail division decreased by 2.7% to $146.1 million for the full year of 2021, compared with $150.1 million for the full year of 2020. This decrease was primarily due to a decrease in same store sales. The Company operated 880 retail stores as of December 31, 2021, compared with 936 retail stores as of December 31, 2020.

Sales for the Company's wholesale division increased by 57.8% to $184.9 million for the full year of 2021, compared with $117.2 million for the full year of 2020. This increase was primarily attributable to increased sales in Mainland China, Hong Kong China, Europe-Other, Japan and United States. 

Total gross profit for the full year of 2021 increase by 10.7% to $101.0 million, compared with $91.2 million for tthe full year of 2020. Total gross margin for the full year of 2021 decreased to 30.5% from 34.1% for the full year of 2020.

Gross profit for the retail business increase by 3.6% to $63.7 million for the full year of 2021, compared with $61.5 million for the full year of 2020. Gross margin for the full year of 2021 was 43.6% compared to 40.9% for the full year of 2020.

Gross profit for the wholesale business increased by 25.4% to $37.3 million for the full year of 2021, compared with $29.7 million for the full year of 2020. Gross margin for the full year of 2021 decreased to 20.2% from 25.4% for the full year of 2020.

Selling expenses for the full year of 2021 increased by 12.8% to $63.1 million, or 19.1% of total sales, compared with $55.9 million, or 20.9% of total sales for the full year of 2020. The increase was attributable to the higher travelling expenses.

General and administrative expenses for the full year of 2021 increased by 23.2% to $38.4 million, or 11.6% of total sales, compared with $31.2 million, or 11.7% of total sales for the full year of 2020. The increase was attributable to the increased salaries.

(Loss) Income from operations was ($0.5 million) for the full year of 2021, compared to $4.1 million for the full year of 2020.

Net loss attributable to the Company for the full year of 2021 was ($0.09 million )compared with 3.3 million for the full year of 2020. Basic and diluted loss per share were ($0.01) for the full year of 2021 compared with $0.22 for the full year of 2020.

Balance Sheet 

As of December 31, 2021, Ever-Glory had approximately $56.6 million of cash and cash equivalents, compared with approximately $81.9 million as of December 31, 2020. Ever-Glory had working capital of approximately $51.0 million as of December 31, 2021, and outstanding bank loans of approximately $69.0 million as of December 31, 2021.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on April 13, 2022(8:00 p.m. Beijing Time on April 13, 2022). Listeners can access the conference call by dialing +1-800-239-9838 or +1-323-794-2551 and using the access code 1990321. The conference call will also be webcast live over the Internet and can be accessed at the Company's website at http://www.everglorygroup.com.

A replay of the call will be available from 11:00 a.m. Eastern Time on April 13 through 11:59 p.m. Eastern Time on April 20 by calling +1-844-512-2921 or +1-412-317-6671 with pin number 1990321.

About Ever-Glory International Group, Inc.

Based in Nanjing, China, Ever-Glory International Group, Inc. is a retailer of branded fashion apparel and a leading global apparel supply chain solution provider. Ever-Glory is the first Chinese apparel Company listed on the American Stock Exchange (now named as NYSE MKT) in July 2008 and then transferred to The NASDAQ Global Market on December 31, 2015. Ever-Glory offers apparel to woman in China under its own brands "La go go", "Velwin", "idole" and  "Jizhu". Ever-Glory is also a leading global apparel supply chain solution provider with a focus on middle-to-high end casual wear, outerwear, and sportswear brands. Ever-Glory services a number of well-known brands and retail stores by providing a complete set of supply chain management services, including: fabric development and design, sampling, sourcing, quality control, manufacturing, logistics, customs clearance and distribution.

Forward-Looking Statements

Certain statements in this release and other written or oral statements made by or on behalf of Ever-Glory International Group, Inc. (the "Company") are "forward looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and the Company's 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, without limitation, market acceptance of the Company's products and offerings, development and expansion of the Company's wholesale and retail operations, the Company's continued access to capital, currency exchange rate fluctuation and other risks and uncertainties. The actual results the Company achieves (including, without limitation, the results stemming from the future implementation of the Company's strategies and the revenue, net income and new retail store projections set forth herein) may differ materially from those contemplated by any forward-looking statements due to such risks and uncertainties (many of which are beyond the Company's control). These statements are based on management's 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. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

For investor and media inquiries, please contact:

Ever-Glory International Group
Huilin Hua
Tel: +86-25-52096859
E-Mail: huahuilin@ever-glory.com.cn

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

AS OF DECEMBER 31, 2021 AND 2020




December 31,
2021

December 31,
2020

ASSETS












CURRENT ASSETS





     Cash and cash equivalents

$

56,573

$

81,865

     Restricted cash

40,768


39,858

     Trading securities

3,251


1,792

     Accounts receivable, net

69,859


53,285

     Inventories

63,841


53,893

     Advances on inventory purchases

8,179


10,261

     Value added tax receivable

1,693


1,244

     Other receivables and prepaid expenses

6,345


5,479

     Amounts due from related parties

220


567

Total Current Assets

250,729


248,244









NON-CURRENT ASSETS







     Equity security investment

5,682


3,932

     Intangible assets, net

4,794


4,794

     Property and equipment, net

36,340


32,164

     Operating lease right-of-use assets

50,077


41,690

     Deferred tax assets

899


902

     Other non-current assets

784


-

Total Non-Current Assets

98,576


83,482

TOTAL ASSETS

$

349,305

$

331,726









LIABILITIES AND STOCKHOLDERS' EQUITY
















CURRENT LIABILITIES







     Bank loans

$

68,992

$

65,919

     Accounts payable

67,930


67,762

     Accounts payable and other payables – related parties

1,332


3,764

     Other payables and accrued liabilities

18,531


16,073

     Value added and other taxes payable

999


909

     Income tax payable

334


1,062

     Current operating lease liabilities

41,633


33,481

Total Current Liabilities

199,751


188,970









NON-CURRENT LIABILITIES







Non-current operating lease liabilities

8,596


8,307

TOTAL LIABILITIES

208,347


197,277









COMMITMENTS AND CONTINGENCIES (Note 9)
















STOCKHOLDERS' EQUITY







     Common stock ($0.001 par value, authorized 50,000,000 shares, 14,812,312 and
         14,809,160 shares issued and outstanding as of December 30, 2021 and
         December 31, 2020, respectively)

15


15

     Additional paid-in capital

3,660


3,650

     Retained earnings

108,210


109,171

     Statutory reserve

21,245


20,376

     Treasury stock (as cost,147,334 shares at December 30, 2021)

(363)


-

     Accumulated other comprehensive income

8,191


4,590

     Amounts due from related party







(3,353)

Total equity

140,958


134,449

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

349,305

$

331,726

 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 




2021

2020







NET SALES

$

330,978

$

267,354









COST OF SALES

230,026


176,141









GROSS PROFIT

100,952


91,213









OPERATING EXPENSES







  Selling expenses

63,074


55,894

  General and administrative expenses

38,416


31,176

Total operating expenses

101,490


87,070









(LOSS) INCOME FROM OPERATIONS

(538)


4,143









OTHER INCOME (EXPENSE)







  Interest income

976


1,014

  Interest expense

(2,391)


(2,345)

  Government subsidy



1,163


1,235

  Gain (loss) from changes in fair values of investments

1,791


(135)

  Other income

1,852


1,830

Total Other Income, Net

3,391


1,599









INCOME BEFORE INCOME TAX EXPENSE

2,853


5,742









INCOME TAX EXPENSE

(2,945)


(2,469)









(LOSS)NET  INCOME

(92)


3,273









Net loss attributable to the non-controlling interest

-


7

NET INCOME ATTRIBUTABLE TO THE COMPANY

$

(92)

$

3,280









(LOSS)NET INCOME

$

(92)

$

3,273

  Foreign currency translation gain

3,601


8,920

COMPREHENSIVE INCOME

$

3,509

$

12,193









Comprehensive  income attributable to the noncontrolling interest

-


7









COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY

$

3,509

$

12,200

(LOSS)EARNINGS PER SHARE ATTRIBUTABLE TO THE COMPANY'S
STOCKHOLDERS:







  Basic and diluted

$

(0.01)

$

0.22

Weighted average number of shares outstanding Basic and diluted

14,811,020


14,806,778










 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 









Additional





Retained Earnings

Accumulated
other

Amounts
due
from

Total
equity
attributable
to stockholders

Non-






Common Stock

paid-in


Treasury
Stock 




Statutory

Comprehensive

related

of the

controlling

Total



Shares

Amount

capital






Unrestricted

reserve

income

party

Company

Interest

equity

Balance at
   January 1,
   2020

14,801,770

$

15

$

3,640


$

-

$

106,328

$

19,939

$

(4,330)

$

(4,932)

$

120,660

$

(1,510)

$

119,150
















































Stock issued for
   compensation

7,390


-


10



-


-


-


-


-


10






10

Net income
   (loss)

-


-


-



-


3,280


-


-


-


3,280


(7)


3,273

Transfer to
   reserve

-


-


-



-


(437)


437


-


-


-






-

Net cash paid to
   related party
   under counter
   guarantee
   agreement
   (Note 11)

-


-


-



-


-


-


-


1,579


1,579


-


1,579
















































Deconsolidation
   of Yiduo

-


-


-



-


-


-


-


-


-


1,517


1,517

Foreign
   currency
   translation
   gain


























8,920






8,920


-


8,920

Balance at
   December
   31, 2020

14,809,160

$

15

$

3,650


$

-

$

109,171

$

20,376

$

4,590

$

(3,353)

$

134,449

$

-

$

134,449
















































Stock issued for
   compensation

3,152


-


10



-


-


-


-


-


10






10

Net income
   (loss)

-


-


-



-


(92)


-


-


-


(92)


-


(92)

Transfer to
   reserve

-


-


-



-


(869)


869


-


-


-






-

Payments
   received
   from party
   under counter
   guarantee
   agreement
   (Note 11)

-


-


-



-


-


-


-


3,353


3,353


-


3,353

Repurchase of
   147,334
   shares of
   common
   stock

-


-


-



(363)






-


-


-


(363)


-


(363)

Foreign
   currency
   translation
   gain


























3,601


-


3,601


-


3,601

Balance at
   December
   31, 2021

14,812,312

$

15

$

3,660


$

(363)

$

108,210

$

21,245

$

8,191

$

-

$

140,958

$

-

$

140,958

 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

FOR THE YEARS ENDED DECEMBER 31, 2021AND 2020






2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES






  Net income

$

(92)


3,273

       Adjustments to reconcile net income to cash provided by operating activities:








  Depreciation and amortization

6,404


5,291

  Loss from sale of property and equipment

610


209

  Loss on deconsolidation of a subsidiary

-


1,085

  Provision of bad debt allowance

1,429


1,117

  Provision for obsolete inventories

6,735


6,753

  Changes in fair value of trading securities

(150)


(131)

  Changes in fair value of investment

(1,641)


(819)

  Deferred income tax

24


154)

  Stock-based compensation

10


10

  Changes in operating assets and liabilities








Accounts receivable

(16,737)


27,173

Inventories

(15,483)


10,161

Value added tax receivable

(416)


1,336

Other receivables and prepaid expenses

(710)


(135)

Advances on inventory purchases

2,418


(28)

Amounts due from related parties

3,563


(480)

Accounts payable

(2,238)


(9,316)

Accounts payable and other payables- related parties

(3,142)


(1,145)

Other payables and accrued liabilities

3,083


(3,098)

Value added and other taxes payable

71


(806)

Income tax payable

(747)


(148)

       Net cash (used in) provided by operating activities

(17,009)


40,456











CASH FLOWS FROM INVESTING ACTIVITIES








  Purchases of property and equipment

(10,123)


(6,354)

  Net purchase of trading securities

(1,309)


(1,665)

Investment payment

(775)


(2,936)

       Net cash used in investing activities

(12,207)


(10,955)











CASH FLOWS FROM FINANCING ACTIVITIES








  Proceeds from bank loans

73,340


90,729

  Repayment of bank loans

(71,790)


(58,658)

  Repurchase of common stock

363


-

  Net collection of amounts due from related party (equity)

863


1,848

       Net cash provided by financing activities

2,776


33,919











EFFECT OF EXCHANGE RATE CHANGES ON CASH

2,058


7,548











NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

(24,382)


70,968











CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF
PERIOD

121,723


50,755











CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

$

97,341

$

121,723











Reconciliation of cash, cash equivalents and restricted cash reported within their consolidated
     balance sheets:








Cash and Cash Equivalents

56,573


81,865

Restricted cash

40,768


39,858



$

97,341

$

121,723











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:








Net asset (liabilities) derecognized due to deconsolidation of a subsidiary

-

$

1,164

Cash paid during the period for:








Interest

$

2,391

$

2,345

Income taxes

$

2,945

$

2,469

 

Cision View original content:https://www.prnewswire.com/news-releases/ever-glory-fourth-quarter-2021-financial-results-301524707.html

Source: Ever-Glory International Group, Inc.
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