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Ever-Glory Reports First Quarter 2021 Financial Results

NEW YORK, May 14, 2021 /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, 2021.

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."

"During the first quarter 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 50-100 stores during 2021, we operated a nationwide network of 921 stores as of March 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." concluded Mr. Kang.

Mr. Jason Jiansong Wang, Chief Financial Officer of Ever-Glory, added, "The first quarter results, are coupled with our ability to increase operating leverage. 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 2021 Financial Results 

Total sales for the first quarter of 2021 were $70.8 million,  a increase of 21.4% from $58.4 million in the first quarter of 2020. This increase was primarily driven by a 4.2% increase in our wholesale business and a 32.0% increase in retail business.

Sales for the Company's branded fashion apparel retail division increased by 32.0% to $47.6 million for the first quarter of 2021, compared with $36.1 million for the first quarter of 2020. This increase was primarily due to the increase in same-store sales. The Company had 921 retail stores as of March 31, 2021, compared with 1,038 retail stores as of March 31, 2020.

Sales for the Company's wholesale division increased by 4.2% to $23.2 million for the first quarter of 2021, compared with $22.3 million for the first quarter of 2020. This increase was primarily attributable to increased sales in Mainland China, Hong Kong, the United Kingdom, and other European markets partially offset for decreased sales in Japan and the United States.

Total gross profit for the first quarter of 2021 increased by 39.9% to $22.4 million, compared with $16 million for the first quarter of 2020. Total gross margin for the first quarter of 2021 increased to 31.7% from 27.5% for the first quarter of 2020.

Gross profit for the retail business increased by 42.5% to $17.9 million for the first quarter of 2021, compared with $12.5 million for the first quarter of 2020. Gross margin for the first quarter of 2021 was 37.6% compared to 34.8% for the first quarter of 2020.

Gross profit for the wholesale business increased by 30.5% to $4.6 million for the first quarter of 2021, compared with $3.5 million for the first quarter of 2020. Gross margin for the first quarter of 2021 increased to 19.6% from 15.7% for the first quarter of 2020.

Selling expenses for the first quarter of 2021 increased by 15.4% to $15.5 million, or 22.0% of total sales, compared with $13.5 million, or 23.1% of total sales for the first quarter of 2020. The increase was attributable to the increased sales.

General and administrative expenses for the first quarter of 2021 increased by 35.7% to $7.9 million, or 11.1% of total sales, compared with $5.8 million, or 9.9% of total sales for the first quarter of 2020. The increase was mainly attributable to the decreased business trip and the exemption of social benefits by the PRC government in 2020.

Loss from operations was $1.0 million for the first quarter of 2021,compared to $3.2 million for the first quarter of 2020.

Net loss attributable to the Company for the first quarter of 2021 was $1.2 million compared with $2.7 million for first quarter of 2020. Basic and diluted loss  per share were $0.08 for the first quarter of 2021 compared with $0.18 for the first quarter of 2020.

Balance Sheet

As of March 31, 2021, Ever-Glory had approximately $78.1 million of cash and cash equivalents, compared with approximately $81.9 million as of December 31, 2020. Ever-Glory had working capital of approximately $43.7 million as of March 31, 2021, and outstanding bank loans of approximately $71.5 million as of March 31, 2021.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on May 14, 2021(8:00 p.m. Beijing Time on May 14, 2021). Listeners can access the conference call by dialing +1-888-394-8218 or + 1-647-484-0475 and using the access code 7935539. 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 May 14 through 11:59 p.m. Eastern Time on May 21 by calling +1-844-512-2921 or +1-412-317-6671 with pin number 7935539.

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" 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 (Unaudited)

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




March 31,
2021



December 31,
2020


ASSETS














CURRENT ASSETS







Cash and cash equivalents


$

78,056



$

81,865


Restricted cash



45,660




39,858


Trading securities



3,036




1,792


Accounts receivable, net



46,719




53,285


Inventories



43,342




53,893


Advances on inventory purchases



7,802




10,261


Value added tax receivable



1,183




1,244


Other receivables and prepaid expenses



5,956




5,479


Amounts due from related parties



674




567


Total Current Assets



232,428




248,244











NON-CURRENT ASSETS









Equity security investment



3,877




3,932


Intangible assets, net



4,712




4,794


Property and equipment, net



31,881




32,164


Operating lease right-of-use assets



55,839




41,690


Deferred tax assets



879




902


Total Non-Current Assets



97,188




83,482


TOTAL ASSETS


$

329,616



$

331,726











LIABILITIES AND STOCKHOLDERS' EQUITY


















CURRENT LIABILITIES









Bank loans


$

71,534



$

65,919


Accounts payable



52,083




67,762


Accounts payable and other payables – related parties



2,829




3,764


Other payables and accrued liabilities



13,522




16,073


Value added and other taxes payable



684




909


Income tax payable



704




1,062


Current operating lease liabilities



47,327




33,481


Total Current Liabilities



188,683




188,970











NON-CURRENT LIABILITIES









Non-current operating lease liabilities



8,622




8,307


TOTAL LIABILITIES



197,305




197,277











COMMITMENTS AND CONTINGENCIES (Note 9)


















STOCKHOLDERS' EQUITY









Stockholders' equity:









Common stock ($0.001 par value, authorized 50,000,000 shares, 14,810,660 and
14,809,160 shares issued and outstanding as of March 31, 2021 and December 31,
2020, respectively)



15




15


Additional paid-in capital



3,655




3,650


Retained earnings



108,001




109,171


Statutory reserve



20,376




20,376


Accumulated other comprehensive income



3,238




4,590


Amounts due from related party



(2,974)




(3,353)


Total equity



132,311




134,449


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

329,616



$

331,726


 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES CONDENSED

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)

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




Three Months Ended




March 31,
2021



March 31,
2020









SALES


$

70,814



$

58,355











COST OF SALES



48,379




42,317











GROSS PROFIT



22,435




16,038











OPERATING EXPENSES









Selling expenses



15,548




13,478


General and administrative expenses



7,851




5,785


Total operating expenses



23,399




19,263











LOSS FROM OPERATIONS



(964)




(3,225)











OTHER INCOME (EXPENSE)









Interest income



224




277


Interest expense



(492)




(341)


Government subsidy



259




460


Other income (expense), net



532




358


Total other income (expense), net



523




754











LOSS BEFORE INCOME TAX



(441)




(2,471)











INCOME TAX EXPENSE



(729)




(227)











NET LOSS



(1,170)




(2,698)


Net income attributable to the non-controlling interest



-




(3)


NET LOSS ATTRIBUTABLE TO THE COMPANY


$

(1,170)



$

(2,701)











NET LOSS


$

(1,170)



$

(2,698)


Foreign currency translation loss



(1,352)




(1,437)


COMPREHENSIVE LOSS


$

(2,522)



$

(4,135)











Comprehensive loss attributable to the non-controlling interest



-




6











COMPREHENSIVE LOSS ATTRIBUTABLE TO THE COMPANY


$

(2,522)



$

(4,129)


LOSS PER SHARE:









Basic and diluted


$

(0.08)



$

(0.18)


Weighted average number of shares outstanding Basic and diluted



14,810,001




14,804,832


 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

FOR THE THREE MONTHS ENDED March 31, 2021 AND 2020 (Unaudited)

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







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 (loss)



party



Company



Interest



equity


Balance at
  January 1,
  2021



14,809,160



$

15



$

3,650



$

109,171



$

20,376



$

4,590



$

(3,353)



$

134,449



$

-



$

134,449











































Stock-based
  compensation



1,500




-




5




-




-




-




-




5




-




5


Net loss



-




-




-




(1,170)




-




-




-




(1,170)




-




(1,170)


Net cash
  received
  from
  related
  party
  under
  counter
  guarantee
  agreement



-




-




-




-




-




-




379




379




-




379


Foreign
  currency
  translation
  loss



-




-




-




-




-




(1,352)




-




(1,352)




-




(1,352)


Balance at
  March 31,
  2021



14,810,660



$

15



$

3,655



$

108,001



$

20,376



$

3,238



$

(2,974)



$

132,311




-



$

132,311


 

 






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 (loss)



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-based
  compensation



3,062




-




5




-




-




-




-




5




-




5


Net income
  (loss)



-




-




-




(2,701)




-




-




-




(2,701)




3




(2,698)


Net cash
  received
  from
  related
  party
  under
  counter
  guarantee
  agreement



-




-




-




-




-




-




785




785




-




785


Foreign
  currency
  translation
  income
  (loss)



-




-




-




-




-




(1,440)




-




(1,440)




3




(1,437)


Balance at
  March 31,
  2020



14,804,832



$

15



$

3,645



$

103,627



$

19,939



$

(5,770)



$

(4,147)



$

117,309




(1,504)



$

115,805


 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

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




Three Months Ended




March 31,
2021



March 31,
2020


CASH FLOWS FROM OPERATING ACTIVITIES









Net loss


$

(1,170)



$

(2,698)


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









Depreciation and amortization



1,377




1,587


Gain on disposal of intangible assets



-




(268)


Loss from sale of property and equipment



102




102


(Recovering from) Provision of bad debt allowance



(196)




278


Provision for obsolete inventories



3,583




4,204


Changes in fair value of trading securities



(262)




-


Changes in fair value of investment



28




-


Deferred income tax



17




104


Stock-based compensation



5




5


Changes in operating assets and liabilities









Accounts receivable



6,509




34,906


Inventories



6,805




10,303


Value added tax receivable



52




210


Other receivables and prepaid expenses



(367)




364


Advances on inventory purchases



2,544




2,855


Amounts due from related parties



(71)




142


Accounts payable



(14,690)




(19,864)


Accounts payable and other payables- related parties



(769)




(1,038)


Other payables and accrued liabilities



(3,221)




(5,587)


Value added and other taxes payable



(220)




(31)


Income tax payable



(358)




(1,019)


Net cash (used in) provided by operating activities



(302)




24,555











CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of property and equipment



(1,378)




(78)


Disposal of intangible assets



-




353


Purchases of trading securities



(1,238)




-


Proceeds from trading securities



255




-


Net cash (used in) provided by investing activities



(2,361)




275











CASH FLOWS FROM FINANCING ACTIVITIES









Proceeds from bank loans



12,336




11,464


Repayment of bank loans



(6,168)




(14,884)


Net collection (advance) of amounts due from related party (equity)



148




748


Net cash provided by (used in) financing activities



6,316




(2,672)











EFFECT OF EXCHANGE RATE CHANGES ON CASH



(1,659)




1,497











NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH



1,993




23,655











CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF
PERIOD



121,723




48,551











CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF
PERIOD


$

123,716



$

72,206











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


















Cash and Cash Equivalents



78,056




70,036


Restricted cash



45,660




2,170




$

123,716



$

72,206











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:









Cash paid during the period for:









Interest


$

492



$

341


Income taxes


$

729



$

1,218


 

 

Cision View original content:http://www.prnewswire.com/news-releases/ever-glory-reports-first-quarter-2021-financial-results-301291570.html

Source: Ever-Glory International Group, Inc.
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