NANJING, China, Nov. 13, 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 third quarter ended September 30, 2019.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "During the third 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 third 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 89 stores during 2019, we operated a nationwide network of 1,157 stores as of September 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 third 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."

Third Quarter 2019 Financial Results 

Total sales for the third quarter of 2019 were $113.3 million, a decrease of 9.7% from $125.5 million in the third quarter of 2018. This decrease was primarily driven by a 20.6% decrease in our retail business and a 4.6% decrease in wholesale business.

Sales for the Company's branded fashion apparel retail division decreased by 20.6% to $31.6 million for the third quarter of 2019, compared with $39.8 million for the third quarter of 2018. This decrease was primarily due to a decrease in the amounts of stores and same-store sales. The Company had 1,157 retail stores as of September 30, 2019, compared with 1,396 retail stores as of September 30, 2018.

Sales for the Company's wholesale division decreased by 4.6% to $81.7 million for the third quarter of 2019, compared with $85.7 million for the third quarter of 2018. This decrease was primarily attributable to a decrease in sales in Mainland China, Hong Kong, Germany and Europe-Other partially offset by an increase in sales in United Kingdom,  Japan and United States.

Total gross profit for the third quarter of 2019 decreased by 19.0% to $24.4 million, compared with $30.1 million for the third quarter of 2018. Total gross margin decreased to 21.5% from 24.0% for the third quarter of 2018.

Gross profit for the retail business decreased by 28.9% to $14.1 million for the third quarter of 2019, compared with $19.8 million for the third quarter of 2018. Gross margin was 44.7%, compared to 49.8% for the third quarter of 2018.

Gross profit for the wholesale business increased by 0.2% to $10.3 million for the third quarter of 2019, compared with $10.2 million for the third quarter of 2018. Gross margin increased to 12.6% from 12.0% for the third quarter of 2018.

Selling expenses for the third quarter of 2019 increased by 2.0% to $17.9 million, or 15.8% of total sales, compared with $17.6 million, or 14.6% of total sales for the third quarter of 2018. The increase was attributable to the marketing expenses associated with the promotion of the retail brand.

General and administrative expenses for the third quarter of 2019 decreased by 11.0% to $7.6 million, or 6.7% of total sales, compared with $8.5 million, or 7.1% of total sales for the third quarter of 2018. The decrease was mainly attributable to the decline in number of stores.

Income (Loss) from operations for the third quarter of 2019 decreased by 129.6% to ($1.2) million compared with $4.0 million for the third quarter of 2018.

Net income (Loss) attributable to the Company for the third quarter of 2019 was ($1.1) million compared with $3.3 million for the third quarter of 2018. Basic and diluted earnings (loss) per share were ($0.07) for the third quarter of 2019 compared with $0.22 for the third quarter of 2018.

Balance Sheet

As of September 30, 2019, Ever-Glory had approximately $45.8 million of cash and cash equivalents, compared with approximately $47.0 million as of December 31, 2018. Ever-Glory had working capital of approximately $54.0 million as of September 30, 2019, and outstanding bank loans of approximately $35.5 million as of September 30, 2019.

Conference Call

The Company will hold a conference call at 7:00 a.m. Eastern Time on November 13, 2019 (8:00 p.m. Beijing Time on November 13, 2019). Listeners can access the conference call by dialing +1-866-548-4713 or + 1-323-794-2093 and using the access code 2080253. 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 13 through 11:59 p.m. Eastern Time on November 20, by dialing +1-844-512-2921 or +1-412-317-6671 and using the access code 2080253.

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.

 

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, 2019 AND DECEMBER 31, 2018 (UNAUDITED)




2019


2018

ASSETS





CURRENT ASSETS





Cash and cash equivalents


$

45,837


$

47,012

Accounts receivable, net



83,863



86,527

Inventories



65,288



65,929

Advances on inventory purchases



9,358



6,420

Value added tax receivable



3,799



2,580

Other receivables and prepaid expenses



7,563



10,204

Amounts due from related parties



123



192

Total Current Assets



215,831



218,864








NONCURRENT ASSETS







Intangible assets, net



4,711



4,962

Property and equipment, net



27,615



28,445

Operating lease right-of-use assets



35,226



-

Deferred tax assets



1,862



-

Total Non-Current Assets



69,414



33,407

TOTAL ASSETS


$

285,245


$

252,271








LIABILITIES AND STOCKHOLDERS' EQUITY














CURRENT LIABILITIES







Bank loans


$

35,492


$

29,497

Accounts payable



77,172



78,412

Accounts payable and other payables – related parties



4,355



4,756

Other payables and accrued liabilities



15,230



21,958

Value added and other taxes payable



530



2,569

Income tax payable



2,249



1,569

Current operating lease liabilities



26,757



-

Total Current Liabilities



161,785



138,761








NONCURRENT LIABILITIES







Deferred tax liabilities



-



354

Non-current operating lease liabilities



8,504



-

TOTAL LIABILITIES



170,289



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, 14,801,770
     and 14,798,198 shares issued and outstanding As of September 30, 2019
     and December 31, 2018, respectively)



15



15

Additional paid-in capital



3,640



3,627

Retained earnings



106,173



105,914

Statutory reserve



19,083



19,083

Accumulated other comprehensive income



(5,822)



(3,578)

Amounts due from related party



(6,648)



(10,354)

Total equity attributable to stockholders of the Company



116,441



114,707

Noncontrolling interest



(1,485)



(1,551)

Total Equity



114,956



113,156

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

285,245


$

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 NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 (UNAUDITED)




Three months ended


Nine months ended



September 30,


September 30,



2019


2018


2019


2018

NET SALES


$

113,326


$

125,480


$

278,598


$

306,806

COST OF SALES



88,967



95,419



195,895



210,858














GROSS PROFIT



24,359



30,061



82,703



95,948














OPERATING EXPENSES













Selling expenses



17,944



17,588



58,651



62,405

General and administrative expenses



7,584



8,519



22,450



25,015

Total Operating Expenses



25,528



26,107



81,101



87,420














(LOSS)INCOME FROM OPERATIONS



(1,169)



3,954



1,602



8,528














OTHER INCOME (EXPENSES)













Interest income



215



307



699



1,003

Interest expense



(265)



(278)



(1,036)



(1,202)

Other income



502



101



1,616



1,102

Total Other Income, Net



452



130



1,279



903














(LOSS) INCOME BEFORE INCOME TAX
EXPENSE



(717)



4,084



2,881



9,431

Income tax expense



(387)



(908)



(2,667)



(2,949)














NET (LOSS) INCOME



(1,104)



3,176



214



6,482














Net loss attributable to the non-controlling
interest



28



140



46



425

NET (LOSS) INCOME ATTRIBUTABLE TO THE
COMPANY



(1,076)



3,316



260



6,907














NET (LOSS) INCOME


$

(1,104)


$

3,176


$

214


$

6,482














Foreign currency translation (loss) gain



(3,729)



(3,674)



(2,244)



(5,742)

Unrealized loss of derivative contracts
designated as cash flow hedge



-



(614)



-



(1,083)

COMPREHENSIVE (LOSS) INCOME



(4,833)



(1,112)



(2,030)



(343)














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



15



57



67



366

COMPREHENSIVE (LOSS)
     INCOME ATTRIBUTABLE TO THE COMPANY


$

(4,818)


$

(1,055)


$

(1,963)


$

23














EARNINGS PER SHARE ATTRIBUTABLE TO
     THE COMPANY'S STOCKHOLDERS













Basic and diluted


$

(0.07)


$

0.22


$

0.02


$

0.47

Weighted average number of shares
     outstanding Basic and diluted



14,801,770



14,798,198



14,801,770



14,796,527

 

 

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 NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 (UNAUDITED)










Retained
Earnings









Total
equity










Common
Stock



 

Additional

paid-in






Statutory



Accumulated
other

Comprehensive



Amounts
due from

related



attributable
to stockholders
of the



Non-

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


Stock issued
     for compensation



1,630




0.002




5




















5








5











































Net income
     (loss)















(1,076)
















(1,076)




(28)




(1,104)


Net cash
     advanced to
     related party
     under counter
     guarantee agreement



























1,215




1,215








1,215


Foreign currency
     translation loss























(3,729)








(3,729)




43




(3,686)


Balance at
     September 30, 2019



14,801,770



$

15



$

3,640



$

106,173



$

19,083



$

(5,822)



$

(6,648)



$

116,441




(1,485)



$

114,956












Retained
Earnings



Accumulated



Amounts



Total
equity
attributable










Common
Stock



Additional

paid-in






Statutory



other
Comprehensive



due from
related



to stockholders
of the



Non-

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



-




-




-




-




-




-




(8,479)




(8,479)




-




(8,479)


Foreign currency
     translation gain (loss)























4,023




-




4,023




(42)




3,981


Balance at
     March 31, 2018



14,795,992




15




3,620




96,010




17,794




6,608




(23,928)




100,119




(1,332)




98,787


Net income
     (loss)















2,776
















2,776




(57)




2,719


Net cash
     advanced to
     related party
     under counter
     guarantee agreement



























2,339




2,339








2,339


Foreign currency
     translation loss























(6,656)








(6,656)




70




(6,586)


Balance at
     June 30, 2018



14,795,992



$

15



$

3,620



$

98,786



$

17,794



$

(48)



$

(21,589)



$

98,578




(1,319)



$

97,259


Stock issued
     for compensation



2,206








7




















7








7


Net income
     (loss)















3,316
















3,316




(140)




3,176


Net cash
     advanced to
     related party
     under counter
     guarantee agreement



























1,337




1,337








1,337


Foreign currency
     translation loss























(4,192)








(4,192)




31




(4,161)


Balance at
     September 30, 2018



14,798,198



$

15



$

3,627



$

102,102



$

17,794



$

(4,240)



$

(20,252)



$

99,046




(1,428)



$

97,618


 

 



 

 

 

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, 2019 AND 2018 (UNAUDITED)




2019



2018


CASH FLOWS FROM OPERATING ACTIVITIES







Net income


$

214



$

6,482


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









Depreciation and amortization



6,824




6,523


Loss from sale of property and equipment



16




102


Provision of bad debt allowance



820




-


Provision for obsolete inventories



3,846




2,697


Deferred income tax



(2,388)




(1,706)


Stock-based compensation



12




7


Changes in operating assets and liabilities









Accounts receivable



312




(15,012)


Inventories



(4,979)




(32,831)


Value added tax receivable



(281)




430


Other receivables and prepaid expenses



966




(19,792)


Advances on inventory purchases



(3,214)




(8,199)


Amounts due from related parties



16




4


Accounts payable



6,253




29,547


Accounts payable and other payables- related parties



(692)




153


Other payables and accrued liabilities



(10,594)




14,054


Value added and other taxes payable



(4,120)




(3,892)


Income tax payable



746




311


Net cash used in operating activities



(6,243)




(21,122)











CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of property and equipment



(6,555)




(9,144)


Net cash used in investing activities



(6,555)




(9,144)











CASH FLOWS FROM FINANCING ACTIVITIES









Proceeds from bank loans



42,570




39,872


Repayment of bank loans



(35,620)




(40,225)


Repayment of loans from related party



10,692




3,232


Advances to related party



(6,755)




(8,183)


Net cash used in financing activities



10,887




(5,304)











EFFECT OF EXCHANGE RATE CHANGES ON CASH



(650)




(2,827)











NET DECREASE IN CASH AND CASH EQUIVALENTS



(2,561)




(38,397)











CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD



47,012




62,876











CASH AND CASH EQUIVALENTS AT END OF PERIOD


$

44,451



$

24,479


RESTRICTED CASH


$

1,386



$

-











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:


















Cash paid during the period for:









Interest


$

1,036



$

1,202


Income taxes


$

4,196



$

4,427


 

 

Cision View original content:http://www.prnewswire.com/news-releases/ever-glory-reports-third-quarter-2019-financial-results-300957228.html

SOURCE Ever-Glory International Group, Inc.

Copyright 2019 PR Newswire

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