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Ever-Glory Reports First Quarter 2019 Financial Results

NANJING, China, May 14, 2019 /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 first quarter ended March 31, 2019.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "During the first quarter, 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. Notably, we achieved year-over-year improvement in gross profit of 13.0% for our wholesale business."

"During the first quarter of 2019, we remained our focus on driving retail business through store network optimization strategy, as well as inventory management strategy," Mr. Kang continued. "Following the remodeling or relocation of 7 stores during 2019, we operated a nationwide network of 1,315 stores as of December 31, 2019."

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

Mr. Jason Jiansong Wang, Chief Financial Officer of Ever-Glory, added, "The first quarter results, coupled with our ability to increase operating leverage, resulted in expanded wholesale operating income during this quarter. Going forward, we remain confident 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."

First Quarter 2019 Financial Results 

Total sales for the first quarter of 2019 were $88.0 million, a decrease of 5.2% from $92.8 million in the first quarter of 2018. This decrease was primarily driven by an 11.4% decrease in our retail business, partially offset by an 11.3% increase in wholesale business.

Sales for the Company's branded fashion apparel retail division decreased by 11.4% to $59.9 million for the first quarter of 2019, compared with $67.5 million for the first quarter of 2018. This decrease was primarily due to a decrease in same-store sales. The Company had 1,315 retail stores as of March 31, 2019, compared with 1,409 retail stores as of March 31, 2018.

Sales for the Company's wholesale division increased by 11.3% to $28.1 million for the first quarter of 2019, compared with $25.3 million for the first quarter of 2018. This increase was primarily attributable to increased sales in Mainland China, other European markets and Japan partially offset for decreased sales in Hong Kong, the United States, the United Kingdom and Germany.

Total gross profit for the first quarter of 2019 decreased by 6.3% to $29.4 million, compared with $31.3 million for the first quarter of 2018. Total gross margin decreased to 33.4% from 33.8% for the first quarter of 2018.

Gross profit for the retail business decreased by 10.7% to $22.8 million for the first quarter of 2019, compared with $25.5 million for the first quarter of 2018. Gross margin was 38.1%, compared to 37.8% for the first quarter of 2018.

Gross profit for the wholesale business increased by 13.0% to $6.6 million for the first quarter of 2019, compared with $5.8 million for the first quarter of 2018. Gross margin increased to 23.3% from 23.0% for the first quarter of 2018.

Selling expenses for the first quarter of 2019 decreased by 5.5% to $21.0 million, or 23.9% of total sales, compared with $22.2 million, or 24.0% of total sales for the first quarter of 2018. The decrease was attributable to the decreased sales.

General and administrative expenses for the first quarter of 2019 decreased by 1.9% to $7.5 million, or 8.6% of total sales, compared with $7.7 million, or 8.3% of total sales for the first quarter of 2018. The decrease was mainly attributable to the decreased office expenses.

Income from operations for the first quarter of 2019 decreased by 43.2% to $0.8 million compared with $1.4 million for the first quarter of 2018.

Net income(loss) attributable to the Company for the first quarter of 2019 was ($0.5) million compared with $0.8 million for the first quarter of 2018. Basic and diluted earnings(loss) per share were ($0.04) for the first quarter of 2019 compared with basic and diluted earnings per share of $0.06 for the first quarter of 2018.

Balance Sheet

As of March 31, 2019, Ever-Glory had approximately $57.9 million of cash and cash equivalents, compared with approximately $47.0 million as of December 31, 2018. Ever-Glory had working capital of approximately $28.5 million as of March 31, 2019, and outstanding bank loans of approximately $28.8 million as of March 31, 2019.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on May 14, 2019 (8:00 p.m. Beijing Time on May 14, 2019). Listeners can access the conference call by dialing +1-800-289-0438 or + 1-323-794-2423 and using the access code 7887070. 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 conference call will be available from 11:00 a.m. Eastern Time on May 14 through 11:59 p.m. Eastern Time on May 21, by dialing +1-844-512-2921 or +1-412-317-6671 and using the access code 7887070.

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", "Sea To Sky" and "idole". 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
Dandan Song
Tel: +86-25-5209-6817
E-Mail: sdd@ever-glory.com.cn
  

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

AS OF MARCH 31, 2019 AND DECEMBER 31, 2018 (UNAUDITED)




2019



2018


ASSETS







CURRENT ASSETS







Cash and cash equivalents


$

57,876



$

47,012


Accounts receivable, net



57,595




86,527


Inventories



55,035




65,929


Advances on inventory purchases



6,087




6,420


Value added tax receivable



1,229




2,580


Other receivables and prepaid expenses



6,365




10,204


Amounts due from related parties



75




192


Total Current Assets



184,262




218,864











NONCURRENT ASSETS









Intangible assets, net



5,046




4,962


Property and equipment, net



29,135




28,445


Operating lease right-of-use assets



64,549




-


Total Non-Current Assets



98,730




33,407


TOTAL ASSETS


$

282,992



$

252,271











LIABILITIES AND STOCKHOLDERS' EQUITY


















CURRENT LIABILITIES









Bank loans


$

28,839



$

29,497


Accounts payable



51,470




78,412


Accounts payable and other payables – related parties



4,040




4,756


Other payables and accrued liabilities



13,769




21,958


Value added and other taxes payable



1,305




2,569


Income tax payable



862




1,569


Current operating lease liabilities



55,434




-


Total Current Liabilities



155,719




138,761











NONCURRENT LIABILITIES









Deferred tax liabilities



330




354


Non-current operating lease liabilities



9,127




-


TOTAL LIABILITIES



165,176




139,115











COMMITMENTS AND CONTINGENCIES


















STOCKHOLDERS' EQUITY









Stockholders' equity:









Preferred stock ($0.001 par value, authorized 5,000,000 shares, no shares issued 
     and outstanding)



-




-


Common stock ($0.001 par value, authorized 50,000,000 shares, 14,800,140 and 
     14,798,198 shares issued and outstanding As of March 31, 2019 and December 
     31, 2018, respectively)



15




15


Additional paid-in capital



3,635




3,627


Retained earnings



105,393




105,914


Statutory reserve



19,083




19,083


Accumulated other comprehensive income



394




(3,578)


Amounts due from related party



(9,253)




(10,354)


Total equity attributable to stockholders of the Company



119,267




114,707


Noncontrolling interest



(1,451)




(1,551)


Total Equity



117,816




113,156


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

282,992



$

252,271


 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES CONDENSED

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME

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

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018 (UNAUDITED)




2019



2018









SALES


$

87,956



$

92,785











COST OF SALES



58,598




61,440











GROSS PROFIT



29,358




31,345











OPERATING EXPENSES









Selling expenses



21,008




22,225


General and administrative expenses



7,529




7,674


Total operating expenses



28,537




29,899











INCOME FROM OPERATIONS



821




1,446











OTHER INCOME (EXPENSE)









Interest income



207




326


Interest expense



(363)




(564)


Other income (expenses)



(295)




136


Total other expenses



(451)




(102)











INCOME BEFORE INCOME TAX EXPENSE



370




1,344











INCOME TAX EXPENSE



(825)




(757)











NET INCOME(LOSS)



(455)




587


Net income(loss) attributable to the non-controlling interest



(66)




228


NET INCOME(LOSS) ATTRIBUTABLE TO THE COMPANY


$

(521)



$

815











NET INCOME(LOSS)


$

(455)



$

587


Foreign currency translation gain



3,972




4,023


COMPREHENSIVE INCOME


$

3,517



$

4,610











Comprehensive loss attributable to the noncontrolling interest



100




270











COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY


$

3,617



$

4,880


EARNINGS(LOSS) PER SHARE:









Basic and diluted


$

(0.04)



$

0.06


Weighted average number of shares outstanding Basic and diluted



14,800,140




14,795,992


 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

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

FOR THE THREE MONTHS ENDED March 31, 2019 AND 2018 (Unaudited)































Additional



Retained Earnings



Accumulated
other



Amounts
due from



Total
equity
attributable
to stockholders



Non-







Common Stock



paid-in






Statutory



Comprehensive



related



of the



controlling



Total




Shares



Amount



capital



Unrestricted



reserve



income



party



Company



Interest



equity


Balance at 
 January 1,
 2019



14,798,198



$

15



$

3,627



$

105,914



$

19,083



$

(3,578)



$

(10,354)



$

114,707




(1,551)



$

113,156











































Stock issued
  for compensation



1,942




0.004




8




-




-




-




-




8








8


Net income (loss)



-




-




-




(521)




-




-




-




(521)




66




(455)


Net cash paid to
 related party under
 counter guarantee
 agreement



-




-




-




-




-




-




1,101




1,101




-




1,101


Foreign currency
 translation loss























3,972




-




3,972




34




4,006


Balance at March 
 31, 2019



14,800,140



$

15



$

3,635



$

105,393



$

19,083



$

394



$

(9,253)



$

119,267




(1,451)



$

117,816


 






Additional



Retained Earnings



Accumulated
other



Amounts
due from



Total
equity
attributable
to stockholders



Non-







Common Stock



paid-in






Statutory



Comprehensive



related



of the



controlling



Total




Shares



Amount



capital



Unrestricted



reserve



income



party



Company



Interest



equity


Balance at 
 January 1,
 2018



14,795,992



$

15



$

3,620



$

95,195



$

17,794



$

2,585



$

(15,449)



$

103,760




(1,062)



$

102,698











































Net income (loss)



-




-




-




815




-




-




-




815




(228)




587


Net cash paid to
 related party under
 counter guarantee
 agreement



-




-




-




-




-




-




(8,480)




(8,480)




-




(8,480)


Foreign currency
 translation loss























4,023




-




4,023




(94)




3,929


Balance at March 
 31, 2018



14,795,992



$

15



$

3,620



$

96,010



$

17,794



$

6,608



$

(23,929)



$

100,118




(1,384)



$

98,734


 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018 (UNAUDITED)




2019



2018


CASH FLOWS FROM OPERATING ACTIVITIES







Net income (loss)


$

(455)



$

587


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









Depreciation and amortization



2,225




2,537


Loss from sale of property and equipment



52




4


Provision for obsolete inventories



1,824




1,626


Deferred income tax



(145)




(234)


Stock-based compensation



8




-


Changes in operating assets and liabilities









Accounts receivable



31,027




28,466


Inventories



10,557




(129)


Value added tax receivable



1,406




1,895


Other receivables and prepaid expenses



3,975




832


Advances on inventory purchases



490




(1,175)


Amounts due from related parties



103




(165)


Accounts payable



(26,505)




(17,944)


Accounts payable and other payables- related parties



(741)




(653)


Other payables and accrued liabilities



(9,565)




(5,182)


Value added and other taxes payable



(2,788)




(1,988)


Income tax payable



(327)




(670)


Net cash provided by operating activities



11,141




7,807











CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of property and equipment



(2,131)




(2,552)


Net cash used in investing activities



(2,131)




(2,552)











CASH FLOWS FROM FINANCING ACTIVITIES









Proceeds from bank loans



6,029




17,346


Repayment of bank loans



(7,408)




(14,780)


Repayment of loans from related party



3,488




-


Advances to related party



(2,163)




(7,692)


Net cash used in financing activities



(54)




(5,126)











EFFECT OF EXCHANGE RATE CHANGES ON CASH



1,908




2,172











NET INCREASE IN CASH AND CASH EQUIVALENTS



10,864




2,301











CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD



47,012




62,876











CASH AND CASH EQUIVALENTS AT END OF PERIOD


$

57,876



$

65,177











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:


















Cash paid during the period for:









Interest


$

363



$

564


Income taxes


$

126



$

1,938


 

Cision View original content:http://www.prnewswire.com/news-releases/ever-glory-reports-first-quarter-2019-financial-results-300849590.html

Source: Ever-Glory International Group, Inc.
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