Ever-Glory Reports Second Quarter 2019 Financial Results

Date : 08/14/2019 @ 9:45AM
Source : PR Newswire (US)
Stock : Ever Glory International Group Inc (EVK)
Quote : 1.5002  0.0 (0.00%) @ 10:00PM

Ever-Glory Reports Second Quarter 2019 Financial Results

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NANJING, China, Aug. 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 second quarter ended June 30, 2019.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "During the second 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 second quarter of 2019, 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 39 stores during 2019, we operated a nationwide network of 1,235 stores as of June 30, 2019."

"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 second 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."

Second Quarter 2019 Financial Results 

Total sales for the second quarter of 2019 were $77.3 million, a decrease of 12.7% from $88.5 million in the second quarter of 2018. This decrease was primarily driven by an 19.4% decrease in our retail business and a 4.0% decrease in wholesale business.

Sales for the Company's branded fashion apparel retail division decreased by 19.4% to $40.1 million for the second quarter of 2019, compared with $49.7 million for the second quarter of 2018. This decrease was primarily due to a decrease in the amounts of stores and same-store sales. The Company had 1,235 retail stores as of June 30, 2019, compared with 1,417 retail stores as of June 30, 2018.

Sales for the Company's wholesale division decreased by 4.0% to $37.3 million for the second quarter of 2019, compared with $38.8 million for the second quarter of 2018. This decrease was primarily attributable to decreased sales in Mainland China, Hong Kong China, Japan, Germany, United Kingdom and other European markets partially offset for increased sales in the United States.

Total gross profit for the second quarter of 2019 decreased by 16.1% to $29.0 million, compared with $34.5 million for the second quarter of 2018. Total gross margin decreased to 37.5% from 39.0% for the second quarter of 2018.

Gross profit for the retail business decreased by 16.1% to $23.0 million for the second quarter of 2019, compared with $27.4 million for the second quarter of 2018. Gross margin was 57.3%, compared to 55.1% for the second quarter of 2018.

Gross profit for the wholesale business decreased by 16.0% to $6.0 million for the second quarter of 2019, compared with $7.2 million for the second quarter of 2018. Gross margin decreased to 16.1% from 18.4% for the second quarter of 2018.

Selling expenses for the second quarter of 2019 decreased by 12.8% to $19.7 million, or 25.5% of total sales, compared with $22.6 million, or 25.5% of total sales for the second quarter of 2018. The decrease was attributable to the marketing expenses associated with the promotion of the retail brand.

General and administrative expenses for the second quarter of 2019 decreased by 16.8% to $7.3 million, or 9.5% of total sales, compared with $8.8 million, or 10.0% of total sales for the second quarter of 2018. The decrease was mainly attributable to the decline in number of stores.

Income from operations for the second quarter of 2019 decreased by 37.7% to $2.0 million compared with $3.1 million for the second quarter of 2018.

Net income attributable to the Company for the second quarter of 2019 was $1.9 million compared with $2.8 million for the second quarter of 2018. Basic and diluted earnings per share were $0.13 for the second quarter of 2019 compared with $0.19 for the second quarter of 2018.

Balance Sheet

As of June 30, 2019, Ever-Glory had approximately $34.5 million of cash and cash equivalents, compared with approximately $47.0 million as of December 31, 2018. Ever-Glory had working capital of approximately $42.6 million as of June 30, 2019, and outstanding bank loans of approximately $26.0 million as of June 30, 2019.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on August 14, 2019 (8:00 p.m. Beijing Time on August 14, 2019). Listeners can access the conference call by dialing +1-800-289-0438 or + 1-323-794-2423 and using the access code 5902045. 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 5902045.

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, 2019 AND DECEMBER 31, 2018 (UNAUDITED)




2019



2018


ASSETS







CURRENT ASSETS







Cash and cash equivalents


$

34,526



$

47,012


Accounts receivable, net



64,704




86,527


Inventories



63,127




65,929


Advances on inventory purchases



8,754




6,420


Value added tax receivable



3,102




2,580


Other receivables and prepaid expenses



6,648




10,204


Amounts due from related parties



144




192


Total Current Assets



181,005




218,864











NONCURRENT ASSETS









Intangible assets, net



4,886




4,962


Property and equipment, net



28,245




28,445


Operating lease right-of-use assets



51,623




-


Total Non-Current Assets



84,754




33,407


TOTAL ASSETS


$

265,759



$

252,271











LIABILITIES AND STOCKHOLDERS' EQUITY


















CURRENT LIABILITIES









Bank loans


$

25,999



$

29,497


Accounts payable



50,352




78,412


Accounts payable and other payables – related parties



4,796




4,756


Other payables and accrued liabilities



12,665




21,958


Value added and other taxes payable



-




2,569


Income tax payable



1,774




1,569


Current operating lease liabilities



42,808




-


Total Current Liabilities



138,394




138,761











NONCURRENT LIABILITIES









Deferred tax liabilities



-




354


Non-current operating lease liabilities



8,839




-


TOTAL LIABILITIES



147,233




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 June 30, 2019 and December 31,
     2018, respectively)



15




15


Additional paid-in capital



3,635




3,627


Retained earnings



107,249




105,914


Statutory reserve



19,083




19,083


Accumulated other comprehensive income



(2,093)




(3,578)


Amounts due from related party



(7,863)




(10,354)


Total equity attributable to stockholders of the Company



120,026




114,707


Noncontrolling interest



(1,500)




(1,551)


Total Equity



118,526




113,156


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

265,759



$

252,271


 

 

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, 2019 AND 2018 (UNAUDITED)




Three months ended



Six months ended




June 30,



June 30,




2019



2018



2019



2018


NET SALES


$

77,316



$

88,541



$

165,272



$

181,326


COST OF SALES



48,330




53,999




106,928




115,439



















GROSS PROFIT



28,986




34,542




58,344




65,887



















OPERATING EXPENSES

















Selling expenses



19,699




22,590




40,706




44,817


General and administrative expenses



7,337




8,823




14,867




16,496


Total Operating Expenses



27,036




31,413




55,573




61,313



















INCOME FROM OPERATIONS



1,950




3,129




2,771




4,574



















OTHER INCOME (EXPENSES)

















Interest income



277




370




484




696


Interest expense



(408)




(360)




(771)




(924)


Other income



1,409




865




1,114




1,001


Total Other Income, Net



1,278




875




827




773



















INCOME BEFORE INCOME TAX EXPENSE



3,228




4,004




3,598




5,347


Income tax expense



(1,455)




(1,285)




(2,280)




(2,041)



















NET INCOME



1,773




2,719




1,318




3,306



















Net loss attributable to the non-controlling interest



83




57




17




285


NET INCOME ATTRIBUTABLE TO THE
COMPANY



1,856




2,776




1,335




3,591



















NET INCOME


$

1,773



$

2,719



$

1,318



$

3,306



















Foreign currency translation (loss) gain



(2,487)




(6,091)




1,485




(2,068)


Unrealized loss of derivative contracts designated as
cash flow hedge



-




(469)




-




(469)


COMPREHENSIVE INCOME (LOSS)



(714)




(3,841)




2,803




769



















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



(48)




(13)




52




309


COMPREHENSIVE INCOME (LOSS)
     ATTRIBUTABLE TO THE COMPANY


$

(762)



$

(3,854)



$

2,855



$

1,078



















EARNINGS PER SHARE ATTRIBUTABLE TO
     THE COMPANY'S STOCKHOLDERS

















Basic and diluted


$

0.13



$

0.19



$

0.09



$

0.24


Weighted average number of shares outstanding
     Basic and diluted



14,800,140




14,795,992




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 AND SIX MONTHS ENDED JUNE 30, 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 received from related party
     under counter guarantee agreement



-




-




-




-




-




-




1,101




1,101




-




1,101


Foreign currency translation gain























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


Net income (loss)



-




-




-




1,856




-




-








1,856




(83)




1,773


Net cash received from related party
     under counter guarantee agreement



-




-




-




-




-








1,390




1,390




-




1,390


Foreign currency translation loss



-




-




-




-




-




(2,487)








(2,487)




34




(2,453)


Balance at June 30, 2019



14,800,140



$

15



$

3,635



$

107,249



$

19,083



$

(2,093)



$

(7,863)



$

120,026




(1,500)



$

118,526








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 gain(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


Net income (loss)



-




-




-




2,776




-




-




-




2,776




(58)




2,718


Net cash received from related party
     under counter guarantee agreement



-




-




-




-




-




-




2,340




2,340




-




2,340


Foreign currency translation loss



-




-




-




-




-




(6,656)




-




(6,656)




123




(6,533)


Balance at June 30, 2018



14,795,992



$

15



$

3,620



$

98,786



$

17,794



$

(48)



$

(21,589)



$

98,578




(1,319)



$

97,259


 

 

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, 2019 AND 2018 (UNAUDITED)




2019



2018


CASH FLOWS FROM OPERATING ACTIVITIES







Net income


$

1,318



$

3,306


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









Depreciation and amortization



4,491




4,903


Loss from sale of property and equipment



53




6


Provision of bad debt allowance



682




-


Provision for obsolete inventories



1,824




1,626


Deferred income tax



(1,461)




(843)


Stock-based compensation



8




-


Changes in operating assets and liabilities









Accounts receivable



21,793




20,150


Inventories



1,145




(10,873)


Value added tax receivable



504




681


Other receivables and prepaid expenses



3,502




(8,942)


Advances on inventory purchases



(2,353)




(7,145)


Amounts due from related parties



(129)




1,117


Accounts payable



(25,954)




(14,296)


Accounts payable and other payables- related parties



58




(1,485)


Other payables and accrued liabilities



(10,789)




8,006


Value added and other taxes payable



(4,684)




(5,924)


Income tax payable



207




(942)


Net cash used in operating activities



(9,785)




(10,655)











CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of property and equipment



(4,082)




(6,295)


Net cash used in investing activities



(4,082)




(6,295)











CASH FLOWS FROM FINANCING ACTIVITIES









Proceeds from bank loans



16,320




28,111


Repayment of bank loans



(19,904)




(30,533)


Repayment of loans from related party



8,149




2,556


Advances to related party



(5,454)




(8,734)


Net cash used in financing activities



(889)




(8,600)











EFFECT OF EXCHANGE RATE CHANGES ON CASH



2,270




(887)











NET DECREASE IN CASH AND CASH EQUIVALENTS



(12,486)




(26,437)











CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD



47,012




62,876











CASH AND CASH EQUIVALENTS AT END OF PERIOD


$

34,526



$

36,439











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:


















Cash paid during the period for:









Interest


$

771



$

924


Income taxes


$

2,436



$

3,016


 

Cision View original content:http://www.prnewswire.com/news-releases/ever-glory-reports-second-quarter-2019-financial-results-300901493.html

SOURCE Ever-Glory International Group, Inc.

Copyright 2019 PR Newswire

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