omniture

Ever-Glory Reports Third Quarter 2018 Financial Results

NANJING, China, Nov. 8, 2018 /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, today reported its financial results for the third quarter ended September 30, 2018.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "During the third quarter, we maintained our focus on developing 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 margin of our retail businesses, as well as a year-over-year revenue increase of 24.2% for our wholesale business."

"During the third quarter of 2018, 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 225 stores during the third quarter, we operated a nationwide network of 1,396 stores as of September 30, 2018."

"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 solid third 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."

Third Quarter 2018 Financial Results

Total sales for the third quarter of 2018 were $125.5 million, an increase of 4.3% from $120.3 million in the third quarter of 2017. This increase was primarily driven by an 24.2% increase in our wholesale business partially offset by a 22.4% decrease in retail business.

Sales for the Company's branded fashion apparel retail division decreased by 22.4% to $39.8 million for the third quarter of 2018, compared with $51.3 million for the third quarter of 2017. This decrease was primarily due to a decrease in same-store sales. The Company had 1,396 retail stores as of September 30, 2018, compared with 1,363 retail stores as of September 30, 2017.

Sales for the Company's wholesale division increased by 24.2% to $85.7 million for the third quarter of 2018, compared with $69.0 million for the third quarter of 2017. This increase was primarily attributable to an increase in sales in Mainland China, Germany, the United Kingdom, Europe-Other, Japan and the United States partially offset by a decrease in sales in Hong Kong, China.

Total gross profit for the third quarter of 2018 decreased by 9.6% to $30.1 million, compared with $33.3 million for the third quarter of 2017. Total gross margin decreased to 24.0% from 27.6% for the third quarter of 2017.

Gross profit for the retail business decreased by 13.9% to $19.8 million for the third quarter of 2018, compared with $23.0 million for the third quarter of 2017. Gross margin was 49.8%, compared to 44.9% for the third quarter of 2017.

Gross profit for the wholesale business increased by 0.1% to $10.24 million for the third quarter of 2018, compared with $10.23 million for the third quarter of 2017. Gross margin decreased to 12.0% from 14.8% for the third quarter of 2017.

Selling expenses for the third quarter of 2018 decreased by 13.1% to $17.6 million, or 14.6% of total sales, compared with $20.2 million, or 16.8% of total sales for the third quarter of 2017. The decrease was attributable to lower retail sales.

General and administrative expenses for the third quarter of 2018 decreased by 16.2% to $8.5 million, or 7.1% of total sales, compared with $10.2 million, or 8.5% of total sales for the third quarter of 2017. The decrease was mainly attributable to lower financial fees.

Income from operations for the third quarter of 2018 increased by 39.0% to $4.0 million compared with $2.8 million for the third quarter of 2017.

Net income attributable to the Company for the third quarter of 2018 was $3.3 million compared with 3.2 million for the third quarter of 2017. Basic and diluted earnings per share were $0.22 for the third quarter of 2018 compared with basic and diluted earnings per share of $0.22 for the third quarter of 2017.

Balance Sheet

As of September 30, 2018, Ever-Glory had approximately $24.5 million of cash and cash equivalents, compared with approximately $62.9 million as of December 31, 2017. Ever-Glory had working capital of approximately $64.6 million as of September 30, 2018, and outstanding bank loans of approximately $35.6 million as of September 30, 2018.

Conference Call

The Company will hold a conference call at 7:00 a.m. Eastern Time on November 8, 2018 (8:00 p.m. Beijing Time on November 8, 2018). Listeners can access the conference call by dialing +1-877-876-9174 or +1-785-424-1669 and using the access code 132217. 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 10:00 a.m. Eastern Time on November 8 through 11:59 p.m. Eastern Time on November 15, by dialing +1-844-512-2921 or +1-412-317-6671 and using the access code 132217.

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 SEPTEMBER 30, 2018 (UNAUDITED) AND DECEMBER 31, 2017




2018


2017

ASSETS





CURRENT ASSETS





Cash and cash equivalents


$

24,479


$

62,876

Accounts receivable, net



93,141



81,859

Inventories



83,243



56,182

Value added tax receivable



3,135



3,757

Other receivables and prepaid expenses



24,181



5,139

Advances on inventory purchases



10,998



3,028

Amounts due from related parties



25



265

Total Current Assets



239,202



213,106








INTANGIBLE ASSETS



6,337



5,995

PROPERTY AND EQUIPMENT, NET



26,746



25,891

TOTAL ASSETS


$

272,285


$

244,992








LIABILITIES AND STOCKHOLDERS' EQUITY














CURRENT LIABILITIES







Bank loans


$

35,562


$

37,730

Accounts payable



99,399



73,788

Accounts payable and other payables - related parties



5,168



4,675

Other payables and accrued liabilities



29,560



16,454

Derivative financial instruments



1,073



-

Value added and other taxes payable



1,879



6,052

Income tax payable



1,931



1,712

Total Current Liabilities



174,572



140,411








NONCURRENT LIABILITIES







Deferred tax liabilities



95



1,883

TOTAL LIABILITIES



174,667



142,294








COMMITMENTS AND CONTINGENCIES














STOCKHOLDERS' EQUITY







Stockholders' equity:







Common stock $0.001 par value, authorized 50,000,000 shares, 14,798,198 and
    14,795,992 shares issued and outstanding as of September 30, 2018 and
    December 31, 2017, respectively)



15



15

Additional paid-in capital



3,627



3,620

Retained earnings



102,102



95,195

Statutory reserve



17,794



17,794

Accumulated other comprehensive income



(4,240)



2,585

Amounts due from related party



(20,252)



(15,449)

Total equity attributable to stockholders of the Company



99,046



103,760

Noncontrolling interest



(1,428)



(1,062)

Total Equity



97,618



102,698

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

272,285


$

244,992

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES CONDENSED

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

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

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017 (UNAUDITED)



Three months ended


Nine months ended


September 30,


September 30,


2018


2017


2018


2017

NET SALES

$

125,480


$

120,257


$

306,806


$

285,148

COST OF SALES


95,419



87,007



210,858



192,740













GROSS PROFIT


30,061



33,250



95,948



92,408













OPERATING EXPENSES












Selling expenses


17,588



20,238



62,405



60,206

General and administrative expenses


8,519



10,167



25,015



24,900

Total Operating Expenses


26,107



30,405



87,420



85,106













INCOME FROM OPERATIONS


3,954



2,845



8,528



7,302













OTHER INCOME (EXPENSES)












Interest income


307



370



1,003



909

Interest expense


(278)



(562)



(1,202)



(1,207)

Other income


101



1,987



1,102



3,088

Total Other Income (Expenses)


130



1,795



903



2,790













INCOME BEFORE INCOME TAX EXPENSE


4,084



4,640



9,431



10,092

Income tax expense


(908)



(1,522)



(2,949)



(3,573)













NET INCOME


3,176



3,118



6,482



6,519













Net loss attributable to the non-controlling interest


140



115



425



376

NET INCOME ATTRIBUTABLE TO THE
COMPANY


3,316



3,233



6,907



6,895













NET INCOME

$

3,176


$

3,118


$

6,482


$

6,519













Foreign currency translation income(loss)


(3,674)



1,823



(5,742)



3,345

Unrealized gain (loss) of derivative contracts
    designated as cash flow hedge


(614)



-



(1,083)



-

COMPREHENSIVE INCOME (LOSS)


(1,112)



4,941



(343)



9,864













Comprehensive loss attributable to the non-controlling interest


57



133



366



411

COMPREHENSIVE INCOME (LOSS)
   ATTRIBUTABLE TO THE COMPANY

$

(1,055)


$

5,074


$

23


$

10,275













EARNINGS PER SHARE ATTRIBUTABLE TO
    THE COMPANY'S STOCKHOLDERS












Basic and diluted

$

0.22


$

0.22


$

0.47


$

0.47

Weighted average number of shares outstanding












Basic and diluted


14,798,198



14,792,836



14,796,527



14,791,778


 

 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 NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017 (UNAUDITED)




2018


2017

CASH FLOWS FROM OPERATING ACTIVITIES





Net income


$

6,482


$

6,519

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







Depreciation and amortization



6,523



5,066

Loss from sale of property and equipment



102



5

Provision of bad debt allowance



-



679

Provision for obsolete inventories



2,697



4,624

Deferred income tax



(1,706)



(2,004)

Stock-based compensation



7



10

Changes in operating assets and liabilities







Accounts receivable



(15,012)



(12,805)

Inventories



(32,831)



(3,423)

Value added tax receivable



430



(762)

Other receivables and prepaid expenses



(19,792)



(3,395)

Advances on inventory purchases



(8,199)



(1,619)

Amounts due from related parties



4



(937)

Accounts payable



29,547



(3,738)

Accounts payable and other payables- related parties



153



232

Other payables and accrued liabilities



14,054



(2,219)

Value added and other taxes payable



(3,892)



(2,561)

Income tax payable



311



(256)

Net cash used in operating activities



(21,122)



(16,584)








CASH FLOWS FROM INVESTING ACTIVITIES







Purchases of property and equipment



(9,144)



(4,356)

Net Cash used in by investing activities



(9,144)



(4,356)








CASH FLOWS FROM FINANCING ACTIVITIES







Proceeds from bank loans



39,872



47,570

Repayment of bank loans



(40,225)



(33,372)

Repayment of loans from related party



3,232



7,596

Advances to related party



(8,183)



(6,464)

Net cash (used in) provided by financing activities



(5,304)



15,330








EFFECT OF EXCHANGE RATE CHANGES ON CASH



(2,827)



1,121








NET DECREASE IN CASH AND CASH EQUIVALENTS



(38,397)



(4,489)








CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD



62,876



45,288








CASH AND CASH EQUIVALENTS AT END OF PERIOD


$

24,479


$

40,799








SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:














Cash paid during the period for:














Interest


$

1,202


$

645

Income taxes


$

4,427


$

3,120

 

Cision View original content:http://www.prnewswire.com/news-releases/ever-glory-reports-third-quarter-2018-financial-results-300746425.html

Source: Ever-Glory International Group, Inc.
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