NANJING, China, March 30,
2020 /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
fourth quarter ended December 31,
2019.
Mr. Yihua Kang, Chairman,
President and Chief Executive Officer of Ever-Glory, said, "During
the fourth 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 full year 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 117 stores during 2019, we operated a
nationwide network of 1,101 stores as of December 31, 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 fourth 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."
Full Year 2019 Financial Results
Total sales for the full year of 2019 were
$383.1 million, a 14.6%
decrease from $448.5 million in the full year of 2018.
This decrease was primarily due to a 10.7% decrease in wholesale
sales and an 18.2% decrease in retail sales.
Wholesale sales from the Company's wholesale
business decreased by 10.7% to $195.2
million for the full year of 2019, compared with
$218.6 million for the full year of
2018. This decrease was primarily attributable to decreased
sales in Mainland China, United
Kingdom, Hong Kong China,
Germany and Europe-Other partially
offset by increased sales in Japan
and United States.
Retail sales from the Company's branded fashion
apparel retail division decreased by 18.2% to $187.9 million for the full year of 2019,
compared with $229.9 million for
the full year of 2018. This decrease was primarily due to a
decrease in same store sales.
Total gross profit for the full year of 2019
decreased by 19.4% to $118.8 million, compared with $147.4 million for the full year of 2018. Total
gross margin for the full year of 2019 decreased to 31.0% from
32.9% for the full year of 2018.
Gross profit for wholesale business decreased by
4.6% to $39.9 million for the
full year of 2019, compared with $41.8 million for the full year of 2018.
Gross margin for the full year of 2019 increased to 20.4% compared
with 19.1% for the full year of 2018.
Gross profit for retail business decreased by 25.2%
to $78.9 million for the full
year of 2019, compared with $105.6 million for the full year of 2018.
Gross margin for the full year of 2019 decreased to 42.0% from
45.9% for the full year of 2018.
Selling expenses for the full year of 2019 decreased
by 12.3% to $80.2 million, or
20.9% of total sales, compared with $91.4 million, or 20.4% of total sales for
the full year of 2018. The decrease was attributable to lower
retail sales.
General and administrative expenses for the full
year of 2019 decreased by 11.8% to $35.1 million, or 9.2% of total sales,
compared with $39.8 million, or
8.9% of total sales for the full year of 2018. The decrease in
absolute amount was mainly attributable to the decline in number of
stores.
Income from operations for the full year of 2019
decreased by 76.5% to $3.5 million compared with $15.0 million for the full year of 2018.
Net income attributable to the Company for
the full year of 2019 decreased by 89.4% to $1.3 million compared with $12.0 million for the full year of 2018.
Basic and diluted earnings per share were $0.09 and $0.81 for the full year of 2019 and 2018,
respectively.
Balance Sheet
As of December 31, 2019,
Ever-Glory had approximately $48.6
million of cash and cash equivalents, compared with
approximately $47.0 million as
of December 31, 2018. Ever-Glory had
working capital of approximately $39.8
million as of December 31,
2019, and outstanding bank loans of approximately
$29.9 million as of December 31, 2019.
Conference Call
The Company will hold a conference call at 8:00 a.m. Eastern Time on March 30, 2020 (8:00
p.m. Beijing Time on March 30,
2020). Listeners can access the conference call by dialing
+1-800-289-0438 or + 1-323-794-2423 and using the access code
1073501. 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
March 30 through 11:59 p.m. Eastern Time on April 6, by dialing +1-844-512-2921 or
+1-412-317-6671 and using the access code 1073501.
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
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands of
U.S. Dollars, except share and per share data or otherwise
stated)
|
AS OF DECEMBER 31,
2019 AND 2018
|
|
|
2019
|
|
2018
|
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
|
48,551
|
|
$
|
47,012
|
|
Accounts receivable,
net
|
|
78,053
|
|
|
86,527
|
|
Inventories
|
|
67,355
|
|
|
65,929
|
|
Value added tax
receivable
|
|
2,495
|
|
|
2,580
|
|
Other receivables and
prepaid expenses
|
|
7,497
|
|
|
10,204
|
|
Advances on inventory
purchases
|
|
9,681
|
|
|
6,420
|
|
Amounts due from
related parties
|
|
123
|
|
|
192
|
|
Total Current
Assets
|
|
213,755
|
|
|
218,864
|
|
|
|
|
|
|
|
|
NONCURRENT
ASSETS
|
|
|
|
|
|
|
Intangible assets,
net
|
|
4,729
|
|
|
4,962
|
|
Property and
equipment, net
|
|
28,812
|
|
|
28,445
|
|
Operating lease
right-of-use assets
|
|
53,379
|
|
|
-
|
|
Deferred tax
assets
|
|
996
|
|
|
-
|
|
Total Non-Current
Assets
|
|
87,916
|
|
|
33,407
|
|
TOTAL
ASSETS
|
$
|
301,671
|
|
$
|
252,271
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
Bank loans
|
$
|
29,931
|
|
$
|
29,497
|
|
Accounts
payable
|
|
72,418
|
|
|
78,412
|
|
Accounts payable and
other payables - related parties
|
|
4,811
|
|
|
4,756
|
|
Other payables and
accrued liabilities
|
|
19,137
|
|
|
21,958
|
|
Value added and other
taxes payable
|
|
1,657
|
|
|
2,569
|
|
Income tax
payable
|
|
1,142
|
|
|
1,569
|
|
Current operating
lease liabilities
|
|
44,888
|
|
|
-
|
|
Total Current
Liabilities
|
|
173,984
|
|
|
138,761
|
|
|
|
|
|
|
|
|
NONCURRENT
LIABILITIES
|
|
|
|
|
|
|
Deferred tax
liabilities
|
|
-
|
|
|
354
|
|
Non-current operating
lease liabilities
|
|
8,537
|
|
|
-
|
|
TOTAL
LIABILITIES
|
|
182,521
|
|
|
139,115
|
|
|
|
|
|
|
|
|
NOTE 13
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 December 31, 2019 and
December 31, 2018,
respectively)
|
|
15
|
|
|
15
|
|
Additional paid-in
capital
|
|
3,640
|
|
|
3,627
|
|
Retained
earnings
|
|
106,328
|
|
|
105,914
|
|
Statutory
reserve
|
|
19,939
|
|
|
19,083
|
|
Accumulated other
comprehensive loss
|
|
(4,330)
|
|
|
(3,578)
|
|
Amounts due from
related party
|
|
(4,932)
|
|
|
(10,354)
|
|
Total equity
attributable to stockholders of the Company
|
|
120,660
|
|
|
114,707
|
|
Noncontrolling
interest
|
|
(1,510)
|
|
|
(1,551)
|
|
Total
Equity
|
|
119,150
|
|
|
113,156
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
301,671
|
|
$
|
252,271
|
|
EVER-GLORY
INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
(In thousands of
U.S. Dollars, except share and per share data or otherwise
stated)
|
FOR THE YEARS
ENDED DECEMBER 31, 2019 AND 2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
SALES
|
$
|
383,101
|
|
$
|
448,508
|
|
|
|
|
|
|
|
|
COST OF
SALES
|
|
264,330
|
|
|
301,153
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
118,771
|
|
|
147,355
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
Selling
expenses
|
|
80,180
|
|
|
91,439
|
|
General and
administrative expenses
|
|
35,123
|
|
|
39,811
|
|
Marketing related
intangible asset impairment
|
|
-
|
|
|
1,086
|
|
Total operating
expenses
|
|
115,303
|
|
|
132,336
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
3,468
|
|
|
15,019
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
|
Interest
income
|
|
1,003
|
|
|
1,375
|
|
Interest
expense
|
|
(1,222)
|
|
|
(1,989)
|
|
Other
income
|
|
2,532
|
|
|
1,977
|
|
Total other
income
|
|
2,313
|
|
|
1,363
|
|
|
|
|
|
|
|
|
INCOME BEFORE
INCOME TAX EXPENSE
|
|
5,781
|
|
|
16,382
|
|
|
|
|
|
|
|
|
INCOME TAX
EXPENSE
|
|
(4,562)
|
|
|
(4,942)
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
1,219
|
|
|
11,440
|
|
|
|
|
|
|
|
|
Net loss attributable
to the non-controlling interest
|
|
51
|
|
|
568
|
|
NET INCOME
ATTRIBUTABLE TO THE COMPANY
|
$
|
1,270
|
|
$
|
12,008
|
|
|
|
|
|
|
|
|
NET
INCOME
|
$
|
1,219
|
|
$
|
11,440
|
|
Foreign currency
translation loss
|
|
(660)
|
|
|
(6,084)
|
|
COMPREHENSIVE
INCOME
|
$
|
559
|
|
$
|
5,356
|
|
|
|
|
|
|
|
|
Comprehensive loss
attributable to the noncontrolling interest
|
|
41
|
|
|
489
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME ATTRIBUTABLE TO THE COMPANY
|
$
|
610
|
|
$
|
5,845
|
|
EARNINGS PER SHARE
ATTRIBUTABLE TO THE COMPANY'S
STOCKHOLDERS:
|
|
|
|
|
|
|
Basic and
diluted
|
$
|
0.09
|
|
$
|
0.81
|
|
Weighted average
number of shares outstanding Basic and diluted
|
|
14,801,770
|
|
|
14,798,198
|
|
EVER-GLORY
INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF EQUITY
|
|
(In thousands of
U.S. Dollars, except share and per share data or otherwise
stated)
|
|
FOR THE
YEARS ENDED DECEMBER 31, 2019 AND 2018
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued
for
compensation
|
|
2,206
|
|
|
0.002
|
|
|
7
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
7
|
|
|
|
|
7
|
|
Net income
(loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
12,008
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
12,008
|
|
(568)
|
|
|
11,440
|
|
Transfer to
reserve
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,289)
|
|
|
1,289
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
Net cash paid to
related party
under counter
guarantee
agreement
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
5,095
|
|
|
5,095
|
|
-
|
|
|
5,095
|
|
Foreign
currency
translation
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,163)
|
|
|
|
|
|
(6,163)
|
|
79
|
|
|
(6,084)
|
|
Balance at
December
31, 2018
|
|
14,798,198
|
|
$
|
15
|
|
$
|
3,627
|
|
$
|
105,914
|
|
$
|
19,083
|
|
$
|
(3,578)
|
|
$
|
(10,354)
|
|
$
|
114,707
|
|
(1,551)
|
|
$
|
113,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for
compensation
|
|
3,572
|
|
|
-
|
|
|
13
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
13
|
|
|
|
|
13
|
|
Net income
(loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,270
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,270
|
|
(51)
|
|
|
1,219
|
|
Transfer to
reserve
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(856)
|
|
|
856
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
Net cash paid to
related party
under counter
guarantee
agreement
(Note 12)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
5,422
|
|
|
5,422
|
|
-
|
|
|
5,422
|
|
Foreign
currency
translation
gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(752)
|
|
|
|
|
|
(752)
|
|
92
|
|
|
(660)
|
|
Balance at
December
31, 2019
|
|
14,801,770
|
|
$
|
15
|
|
$
|
3,640
|
|
$
|
106,328
|
|
$
|
19,939
|
|
$
|
(4,330)
|
|
$
|
(4,932)
|
|
$
|
120,660
|
|
(1,510)
|
|
$
|
119,150
|
|
EVER-GLORY
INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(In thousands of
U.S. Dollars, except share and per share data or otherwise
stated)
|
|
FOR THE YEARS
ENDED DECEMBER 31, 2019 AND 2018
|
|
|
|
|
2019
|
|
2018
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net income
|
$
|
1,219
|
|
$
|
11,440
|
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
Intangible asset
impairment loss
|
|
-
|
|
|
1,086
|
|
Depreciation and
amortization
|
|
8,239
|
|
|
6,664
|
|
Loss from sale of
property and equipment
|
|
9
|
|
|
108
|
|
Provision of bad debt
allowance
|
|
1,062
|
|
|
660
|
|
Provision for
obsolete inventories
|
|
2,804
|
|
|
3,324
|
|
Deferred income
tax
|
|
(1,472)
|
|
|
(1,370)
|
|
Stock-based
compensation
|
|
12
|
|
|
7
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
Accounts
receivable
|
|
6,652
|
|
|
(9,893)
|
|
Inventories
|
|
(5,145)
|
|
|
(16,462)
|
|
Value added tax
receivable
|
|
1,077
|
|
|
1,016
|
|
Other receivables and
prepaid expenses
|
|
2,394
|
|
|
(5,659)
|
|
Advances on inventory
purchases
|
|
(3,395)
|
|
|
(3,698)
|
|
Amounts due from
related parties
|
|
67
|
|
|
(2,761)
|
|
Accounts
payable
|
|
(2,305)
|
|
|
8,485
|
|
Accounts payable and
other payables- related parties
|
|
176
|
|
|
6,275
|
|
Other payables and
accrued liabilities
|
|
(4,052)
|
|
|
5,604
|
|
Value added and other
taxes payable
|
|
(2,948)
|
|
|
(2,210)
|
|
Income tax
payable
|
|
(409)
|
|
|
(54)
|
|
Net cash provided by
operating activities
|
|
3,985
|
|
|
2,562
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
(8,675)
|
|
|
(12,182)
|
|
Net cash used in
investing activities
|
|
(8,675)
|
|
|
(12,182)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Proceeds from bank
loans
|
|
59,528
|
|
|
64,006
|
|
Repayment of bank
loans
|
|
(58,665)
|
|
|
(70,513)
|
|
Repayment of loans
from related party
|
|
13,163
|
|
|
6,657
|
|
Advances to related
party
|
|
(8,381)
|
|
|
(8,428)
|
|
Interest income
received from related party
|
|
472
|
|
|
2,997
|
|
Net cash provided by
(used in) financing activities
|
|
6,117
|
|
|
(5,281)
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
|
2,316
|
|
|
(963)
|
|
|
|
|
|
|
|
|
NET INCREASE IN
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH
|
|
3,743
|
|
|
(15,864)
|
|
|
|
|
|
|
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH AT BEGINNING
OF PERIOD
|
|
47,012
|
|
|
62,876
|
|
|
|
|
|
|
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH AT END OF
PERIOD
|
$
|
50,755
|
|
$
|
47,012
|
|
|
|
|
|
|
|
|
Reconciliation of
cash, cash equivalents and restricted cash reported within
their
consolidated balance sheets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
48,551
|
|
|
47,012
|
|
Restricted cash
(booked in other receivables and prepaid expenses)
|
|
2,204
|
|
|
-
|
|
|
$
|
50,755
|
|
$
|
47,012
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during
the period for:
|
|
|
|
|
|
|
Interest
|
$
|
1,222
|
|
$
|
1,755
|
|
Income
taxes
|
$
|
6,327
|
|
$
|
6,350
|
|
View original
content:http://www.prnewswire.com/news-releases/ever-glory-reports-fourth-quarter-2019-financial-results-301031521.html
SOURCE Ever-Glory International Group, Inc.