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
|
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.