NANJING, China, Aug. 14,
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
second quarter ended June 30,
2018.
Mr. Yihua Kang, Chairman,
President and Chief Executive Officer of Ever-Glory, said, "During
the second 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. Notably, we achieved year-over-year
improvement in gross margins for both of our retail and wholesale
businesses, as well as a year-over-year revenue increase of 17.6%
for our wholesale business."
"During the second 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 69 stores
during the second quarter, we operated a nationwide network of
1,417 stores as of June 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. Our wholesale gross
margin continued to improve on a year-over-year basis. 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, "We're delighted to see
that our operating efficiency continued to improve in the second
quarter. Overall gross margin increased by 60 basis points, with
wholesale gross margin increasing by 50 basis points, compared with
the same period of last year. With strengthened fundamentals and
improved operating leverage of our overall business, we are excited
about the opportunities that lay before us and we look forward to
updating you with our progress next quarter."
Second Quarter 2018 Financial Results
Total sales for the second quarter of 2018 were
$88.5 million, an increase of 11.0%
from $79.8 million in the second
quarter of 2017. This increase was primarily driven by a 17.6%
increase in our wholesale business and an 6.3% increase in retail
business.
Sales for the Company's branded fashion apparel retail
division increased by 6.3% to $49.7
million for the second quarter of 2018, compared with
$46.8 million for the second quarter
of 2017. This increase was primarily due to an increase in
same-store sales. The Company had 1,417 retail stores as of
June 30, 2018, compared with 1,362
retail stores as of June 30,
2017.
Sales for the Company's wholesale division
increased by 17.6% to $38.8 million
for the second quarter of 2018, compared with $33.0 million for the second quarter of 2017.
This increase was primarily attributable to an increase in sales in
Mainland China, United Kingdom,
United States and Japan, partially offset by a decrease in sales
in Hong Kong, Germany and Europe other areas.
Total gross profit for the second quarter of 2018
increased by 12.7% to $34.5 million,
compared with $30.7 million for the
second quarter of 2017. Total gross margin increased to 39.0% from
38.4% for the second quarter of 2017.
Gross profit for the retail business increased by 10.6%
to $27.4 million for the second
quarter of 2018, compared with $24.8
million for the second quarter of 2017. Gross margin was
55.1%, compared to 52.9% for the second quarter of 2017.
Gross profit for the wholesale business
increased by 21.3% to $7.2 million
for the second quarter of 2018, compared with $5.9 million for the second quarter of 2017.
Gross margin increased to 18.4% from 17.9% for the second quarter
of 2017.
Selling expenses for the second quarter of 2018 increased
by 11.7% to $22.6 million, or 25.5%
of total sales, compared with $20.2
million, or 25.3% of total sales for the second quarter of
2017. The increase was attributable to the increased store
decoration and marketing expenses.
General and administrative expenses for the second
quarter of 2018 increased by 18.0% to $8.8
million, or 10.0% of total sales, compared with $7.5 million, or 9.4% of total sales for the
second quarter of 2017. The increase was mainly attributable to the
increased average salaries.
Income from operations for the second quarter of 2018
increased by 6.1% to $3.1 million
compared with $2.9 million for the
second quarter of 2017.
Net income attributable to the Company for the second
quarter of 2018 was $2.8 million
compared with 2.7 million for the second quarter of 2017. Basic and
diluted earnings per share were $0.19
for the second quarter of 2018 compared with basic and diluted
earnings per share of $0.18 for the
second quarter of 2017.
Balance Sheet
As of June 30, 2018, Ever-Glory
had approximately $36.4 million of
cash and cash equivalents, compared with approximately $62.9 million as of December 31, 2017. Ever-Glory had working capital
of approximately $65.7 million as of
June 30, 2018, and outstanding bank
loans of approximately $34.8 million
as of June 30, 2018.
Conference Call
The Company will hold a conference call at 8:00 a.m. Eastern Time on August 14, 2018 (8:00
p.m. Beijing Time on August 14,
2018). Listeners can access the conference call by dialing
+1-888-394-8218 or + 1-323-701-0225 and using the access code
3000953. 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
August 14 through 11:59 p.m. Eastern Time on August 21, by dialing +1-844-512-2921 or
+1-412-317-6671 and using the access code 3000953.
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 JUNE 30,
2018 (UNAUDITED) AND DECEMBER 31, 2017
|
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
|
36,439
|
|
$
|
62,876
|
Accounts receivable,
net
|
|
61,072
|
|
|
81,859
|
Inventories
|
|
64,418
|
|
|
56,182
|
Value added tax
receivable
|
|
3,037
|
|
|
3,757
|
Other receivables and
prepaid expenses
|
|
13,771
|
|
|
5,139
|
Advances on inventory
purchases
|
|
9,858
|
|
|
3,028
|
Amounts due from
related parties
|
|
-
|
|
|
265
|
Total Current
Assets
|
|
188,595
|
|
|
213,106
|
|
|
|
|
|
|
INTANGIBLE
ASSETS
|
|
6,290
|
|
|
5,995
|
PROPERTY AND
EQUIPMENT, NET
|
|
26,305
|
|
|
25,891
|
TOTAL
ASSETS
|
$
|
221,190
|
|
$
|
244,992
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Bank loans
|
$
|
34,768
|
|
$
|
37,730
|
Accounts
payable
|
|
58,745
|
|
|
73,788
|
Accounts payable and
other payables - related parties
|
|
4,448
|
|
|
4,675
|
Other payables and
accrued liabilities
|
|
23,440
|
|
|
16,454
|
Derivative financial
instruments
|
|
469
|
|
|
-
|
Value added and other
taxes payable
|
|
245
|
|
|
6,052
|
Income tax
payable
|
|
777
|
|
|
1,712
|
Total Current
Liabilities
|
|
122,892
|
|
|
140,411
|
|
|
|
|
|
|
NONCURRENT
LIABILITIES
|
|
|
|
|
|
Deferred tax
liabilities
|
|
1,039
|
|
|
1,883
|
TOTAL
LIABILITIES
|
|
123,931
|
|
|
142,294
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Common stock
$0.001 par value, authorized 50,000,000 shares, 14,795,992 and
14,795,992 shares issued and outstanding
As of June 30, 2018 and December
31, 2017, respectively)
|
|
15
|
|
|
15
|
Additional paid-in
capital
|
|
3,620
|
|
|
3,620
|
Retained
earnings
|
|
98,786
|
|
|
95,195
|
Statutory
reserve
|
|
17,794
|
|
|
17,794
|
Accumulated other
comprehensive income
|
|
(48)
|
|
|
2,585
|
Amounts due from
related party
|
|
(21,589)
|
|
|
(15,449)
|
Total equity
attributable to stockholders of the Company
|
|
98,578
|
|
|
103,760
|
Noncontrolling
interest
|
|
(1,319)
|
|
|
(1,062)
|
Total
Equity
|
|
97,259
|
|
|
102,698
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
221,190
|
|
$
|
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
SIX MONTHS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED)
|
|
|
Three months
ended
|
|
Six months
ended
|
|
June
30,
|
|
June
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
NET
SALES
|
$
|
88,541
|
|
$
|
79,771
|
|
$
|
181,326
|
|
$
|
164,891
|
COST OF
SALES
|
|
53,999
|
|
|
49,121
|
|
|
115,439
|
|
|
105,732
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
34,542
|
|
|
30,650
|
|
|
65,887
|
|
|
59,159
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
22,590
|
|
|
20,223
|
|
|
44,817
|
|
|
39,968
|
General and
administrative expenses
|
|
8,823
|
|
|
7,479
|
|
|
16,496
|
|
|
14,734
|
Total Operating
Expenses
|
|
31,413
|
|
|
27,702
|
|
|
61,313
|
|
|
54,702
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
3,129
|
|
|
2,948
|
|
|
4,574
|
|
|
4,457
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES)
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
370
|
|
|
282
|
|
|
696
|
|
|
539
|
Interest
expense
|
|
(360)
|
|
|
(318)
|
|
|
(924)
|
|
|
(645)
|
Other
income
|
|
865
|
|
|
523
|
|
|
1,001
|
|
|
1,100
|
Total Other
Income, Net
|
|
875
|
|
|
487
|
|
|
773
|
|
|
994
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE
INCOME TAX EXPENSE
|
|
4,004
|
|
|
3,435
|
|
|
5,347
|
|
|
5,451
|
Income tax
expense
|
|
(1,285)
|
|
|
(833)
|
|
|
(2,041)
|
|
|
(2,050)
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
2,719
|
|
|
2,602
|
|
|
3,306
|
|
|
3,401
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to the non-controlling interest
|
|
57
|
|
|
86
|
|
|
285
|
|
|
261
|
NET INCOME
ATTRIBUTABLE TO THE
COMPANY
|
|
2,776
|
|
|
2,688
|
|
|
3,591
|
|
|
3,662
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
$
|
2,719
|
|
$
|
2,602
|
|
$
|
3,306
|
|
$
|
3,401
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation (loss) gain
|
|
(6,091)
|
|
|
1,063
|
|
|
(2,068)
|
|
|
1,522
|
Unrealized gain
(loss) of derivative contracts
designated as cash flow hedge
|
|
(469)
|
|
|
-
|
|
|
(469)
|
|
|
-
|
COMPREHENSIVE
INCOME (LOSS)
|
|
(3,841)
|
|
|
3,665
|
|
|
769
|
|
|
4,923
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income(loss) attributable to the non-
controlling interest
|
|
(13)
|
|
|
98
|
|
|
309
|
|
|
278
|
COMPREHENSIVE
INCOME (LOSS)
ATTRIBUTABLE TO THE COMPANY
|
$
|
(3,854)
|
|
$
|
3,763
|
|
$
|
1,078
|
|
$
|
5,201
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE
ATTRIBUTABLE TO
THE COMPANY'S STOCKHOLDERS
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
|
0.19
|
|
$
|
0.18
|
|
$
|
0.24
|
|
$
|
0.25
|
Weighted average
number of shares outstanding
Basic and diluted
|
|
14,795,992
|
|
|
14,792,836
|
|
|
14,795,992
|
|
|
14,791,240
|
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 SIX MONTHS
ENDED JUNE 30, 2018 AND 2017 (UNAUDITED)
|
|
|
2018
|
|
2017
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
Net income
|
$
|
3,306
|
|
$
|
3,401
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
4,903
|
|
|
3,481
|
Loss from sale of
property and equipment
|
|
6
|
|
|
5
|
Provision of bad debt
allowance
|
|
-
|
|
|
688
|
Provision for
obsolete inventories
|
|
1,626
|
|
|
4,105
|
Deferred income
tax
|
|
(843)
|
|
|
(1,744)
|
Stock-based
compensation
|
|
-
|
|
|
10
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
Accounts
receivable
|
|
20,150
|
|
|
13,865
|
Inventories
|
|
(10,873)
|
|
|
(11,750)
|
Value added tax
receivable
|
|
681
|
|
|
(1,446)
|
Other receivables and
prepaid expenses
|
|
(8,942)
|
|
|
(673)
|
Advances on inventory
purchases
|
|
(7,145)
|
|
|
(2,684)
|
Amounts due from
related parties
|
|
1,117
|
|
|
(161)
|
Accounts
payable
|
|
(14,296)
|
|
|
(7,542)
|
Accounts payable and
other payables- related parties
|
|
(1,485)
|
|
|
(818)
|
Other payables and
accrued liabilities
|
|
8,006
|
|
|
(1,353)
|
Value added and other
taxes payable
|
|
(5,924)
|
|
|
(4,048)
|
Income tax
payable
|
|
(942)
|
|
|
(753)
|
Net cash used in
operating activities
|
|
(10,655)
|
|
|
(7,417)
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(6,295)
|
|
|
(2,220)
|
Net Cash (used in)
provided by investing activities
|
|
(6,295)
|
|
|
(2,220)
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
Proceeds from bank
loans
|
|
28,111
|
|
|
25,664
|
Repayment of bank
loans
|
|
(30,533)
|
|
|
(17,821)
|
Repayment of loans
from related party
|
|
2,556
|
|
|
482
|
Advances to related
party
|
|
(8,734)
|
|
|
(6,433)
|
Net cash used in
financing activities
|
|
(8,600)
|
|
|
1,892
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
|
(887)
|
|
|
310
|
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
(26,437)
|
|
|
(7,435)
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
62,876
|
|
|
45,288
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$
|
36,439
|
|
$
|
37,853
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during
the period for:
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
$
|
924
|
|
$
|
645
|
Income
taxes
|
$
|
3,016
|
|
$
|
3,120
|
View original
content:http://www.prnewswire.com/news-releases/ever-glory-reports-second-quarter-2018-financial-results-300696642.html
SOURCE Ever-Glory International Group, Inc.