NANJING, China, March 29,
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
fourth quarter ended December 31,
2018.
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.
Notably, we achieved year-over-year improvement in gross
margin of 15.7% for our wholesale businesses, as well as 6.0%
for our retail business."
"During the fourth 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 250 stores
during 2018, we operated a nationwide network of 1,381 stores as of
December 31, 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 fourth 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."
Full Year 2018 Financial Results
Total sales for the full year of 2018 were
$448.5 million, a 7.9%
increase from $415.6 million in the full year of 2017.
This increase was primarily due to a 14.9% increase in wholesale
sales and a 2.0% increase in retail sales.
Wholesale sales from the Company's wholesale
business increased by 14.9% to $218.6
million for the full year of 2018, compared with
$190.2 million for the full year of
2017. This increase was primarily due to increased sales in
Japan, Mainland China,
United Kingdom and United States partially offset by decreased
sales in Hong Kong China,
Germany and Europe-Other.
Retail sales from the Company's branded fashion
apparel retail division increased by 2.0% to $229.9 million for the full year of 2018,
compared with $225.3 million for
the full year of 2017. This increase was primarily due to an
increase in same store sales.
Total gross profit for the full year of 2018
increased by 8.6% to $147.4 million, compared with $135.7 million for the full year of 2017. Total
gross margin for the full year of 2018 increased to 32.9% from
32.7% for the full year of 2017.
Gross profit for wholesale business increased by
15.7% to $41.8 million for the
full year of 2018, compared with $36.1 million for the full year of 2017.
Gross margin for the full year of 2018 increased to 19.1% compared
with 19.0% for the full year of 2017.
Gross profit for retail business increased by 6.0%
to $105.6 million for the full
year of 2018, compared with $99.6 million for the full year of 2017.
Gross margin for the full year of 2018 increased to 45.9% from
44.2% for the full year of 2017.
Selling expenses for the full year of 2018 increased
by 6.4% to $91.4 million, or
20.4% of total sales, compared with $85.9 million, or 20.7% of total sales for
the full year of 2017. The increase was attributable to higher
retail sales.
General and administrative expenses for the full
year of 2018 increased by 13.6% to $39.8 million, or 8.9% of total sales,
compared with $35.1 million, or
8.4% of total sales for the full year of 2017. The
increase was mainly due to increased average salaries.
Income from operations for the full year of 2018
increased by 1.8% to $15.0 million compared with $14.7 million for the full year of 2017.
Net income attributable to the Company for
the full year of 2018 decreased by 3.6% to $12.0 million compared with $12.5 million for the full year of 2017.
Basic and diluted earnings per share were $0.81 and $0.84 for the full year of 2018 and 2017,
respectively.
Balance Sheet
As of December 31, 2018,
Ever-Glory had approximately $47.0
million of cash and cash equivalents, compared with
approximately $62.9 million as
of December 31, 2017. Ever-Glory had
working capital of approximately $80.1
million as of December 31,
2018, and outstanding bank loans of approximately
$29.5 million as of December 31, 2018.
Conference Call
The Company will hold a conference call at 8:00 a.m. Eastern Time on March 29, 2019 (8:00
p.m. Beijing Time on March 29,
2019). Listeners can access the conference call by dialing
+1-888-394-8218 or + 1-323-701-0225 and using the access code
1693644. 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
March 29 through 11:59 p.m. Eastern Time on April 5, by dialing +1-844-512-2921 or
+1-412-317-6671 and using the access code 1693644.
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
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands of
U.S. Dollars, except share and per share data or otherwise
stated)
|
AS OF DECEMBER 31,
2018 AND 2017
|
|
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
47,012
|
|
|
$
|
62,876
|
|
Accounts receivable,
net
|
|
|
86,527
|
|
|
|
81,859
|
|
Inventories
|
|
|
65,929
|
|
|
|
56,182
|
|
Value added tax
receivable
|
|
|
2,580
|
|
|
|
3,757
|
|
Other receivables and
prepaid expenses
|
|
|
10,204
|
|
|
|
5,139
|
|
Advances on inventory
purchases
|
|
|
6,420
|
|
|
|
3,028
|
|
Amounts due from
related parties
|
|
|
192
|
|
|
|
265
|
|
Total Current
Assets
|
|
|
218,864
|
|
|
|
213,106
|
|
|
|
|
|
|
|
|
|
|
INTANGIBLE
ASSETS
|
|
|
4,962
|
|
|
|
5,995
|
|
PROPERTY AND
EQUIPMENT, NET
|
|
|
28,445
|
|
|
|
25,891
|
|
TOTAL
ASSETS
|
|
$
|
252,271
|
|
|
$
|
244,992
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Bank loans
|
|
$
|
29,497
|
|
|
$
|
37,730
|
|
Accounts
payable
|
|
|
78,412
|
|
|
|
73,788
|
|
Accounts payable and
other payables - related parties
|
|
|
4,756
|
|
|
|
4,675
|
|
Other payables and
accrued liabilities
|
|
|
21,958
|
|
|
|
16,454
|
|
Value added and other
taxes payable
|
|
|
2,569
|
|
|
|
6,052
|
|
Income tax
payable
|
|
|
1,569
|
|
|
|
1,712
|
|
Total Current
Liabilities
|
|
|
138,761
|
|
|
|
140,411
|
|
|
|
|
|
|
|
|
|
|
NONCURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Deferred tax
liabilities
|
|
|
354
|
|
|
|
1,883
|
|
TOTAL
LIABILITIES
|
|
|
139,115
|
|
|
|
142,294
|
|
|
|
|
|
|
|
|
|
|
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, 14,798,198 and
14,795,992 shares issued and outstanding as of
December 31, 2018 and
December 31, 2017,
respectively)
|
|
|
15
|
|
|
|
15
|
|
Additional paid-in
capital
|
|
|
3,627
|
|
|
|
3,620
|
|
Retained
earnings
|
|
|
105,914
|
|
|
|
95,195
|
|
Statutory
reserve
|
|
|
19,083
|
|
|
|
17,794
|
|
Accumulated other
comprehensive income
|
|
|
(3,578)
|
|
|
|
2,585
|
|
Amounts due from
related party
|
|
|
(10,354)
|
|
|
|
(15,449)
|
|
Total equity
attributable to stockholders of the Company
|
|
|
114,707
|
|
|
|
103,760
|
|
Noncontrolling
interest
|
|
|
(1,551)
|
|
|
|
(1,062)
|
|
Total
Equity
|
|
|
113,156
|
|
|
|
102,698
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$
|
252,271
|
|
|
$
|
244,992
|
|
|
|
|
|
|
|
|
|
|
See the accompanying
notes to the consolidated financial statements.
|
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, 2018 AND 2017
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
SALES
|
|
$
|
448,508
|
|
|
$
|
415,581
|
|
|
|
|
|
|
|
|
|
|
COST OF
SALES
|
|
|
301,153
|
|
|
|
279,839
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
147,355
|
|
|
|
135,742
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
91,439
|
|
|
|
85,940
|
|
General and
administrative expenses
|
|
|
39,811
|
|
|
|
35,053
|
|
Marketing related
intangible asset impairment
|
|
|
1,086
|
|
|
|
-
|
|
Total operating
expenses
|
|
|
132,336
|
|
|
|
120,993
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
|
15,019
|
|
|
|
14,749
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
1,375
|
|
|
|
1,260
|
|
Interest
expense
|
|
|
(1,989)
|
|
|
|
(1,648)
|
|
Other
income
|
|
|
1,977
|
|
|
|
3,509
|
|
Total other
income
|
|
|
1,363
|
|
|
|
3,121
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE
INCOME TAX EXPENSE
|
|
|
16,382
|
|
|
|
17,870
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX
EXPENSE
|
|
|
(4,942)
|
|
|
|
(5,805)
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
|
11,440
|
|
|
|
12,065
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to the non-controlling interest
|
|
|
568
|
|
|
|
394
|
|
NET INCOME
ATTRIBUTABLE TO THE COMPANY
|
|
$
|
12,008
|
|
|
$
|
12,459
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
$
|
11,440
|
|
|
$
|
12,065
|
|
Foreign currency
translation gain
|
|
|
(6,163)
|
|
|
|
5,882
|
|
COMPREHENSIVE
INCOME
|
|
$
|
5,277
|
|
|
$
|
17,947
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
attributable to the noncontrolling interest
|
|
|
79
|
|
|
|
450
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME ATTRIBUTABLE TO THE COMPANY
|
|
$
|
5,198
|
|
|
$
|
18,397
|
|
EARNINGS PER SHARE
ATTRIBUTABLE TO THE COMPANY'S
STOCKHOLDERS:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.81
|
|
|
$
|
0.84
|
|
Weighted average
number of shares outstanding Basic and diluted
|
|
|
14,796,947
|
|
|
|
14,795,992
|
|
|
|
|
|
|
|
|
|
|
See the accompanying
notes to the consolidated financial statements.
|
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, 2018 AND 2017
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net income
|
|
$
|
11,440
|
|
|
$
|
12,065
|
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Intangible asset
impairment loss
|
|
|
1,086
|
|
|
|
-
|
|
Depreciation and
amortization
|
|
|
6,664
|
|
|
|
7,015
|
|
Loss from sale of
property and equipment
|
|
|
108
|
|
|
|
24
|
|
Provision of bad debt
allowance
|
|
|
660
|
|
|
|
1,223
|
|
Provision for
obsolete inventories
|
|
|
3,324
|
|
|
|
4,624
|
|
Deferred income
tax
|
|
|
(1,370)
|
|
|
|
(1,530)
|
|
Stock-based
compensation
|
|
|
7
|
|
|
|
18
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(9,893)
|
|
|
|
(11,204)
|
|
Inventories
|
|
|
(16,462)
|
|
|
|
(7,919)
|
|
Value added tax
receivable
|
|
|
1,016
|
|
|
|
(600)
|
|
Other receivables and
prepaid expenses
|
|
|
(5,659)
|
|
|
|
(1,136)
|
|
Advances on inventory
purchases
|
|
|
(3,698)
|
|
|
|
307
|
|
Amounts due from
related parties
|
|
|
(2,761)
|
|
|
|
(592)
|
|
Accounts
payable
|
|
|
8,485
|
|
|
|
11,489
|
|
Accounts payable and
other payables- related parties
|
|
|
6,275
|
|
|
|
351
|
|
Other payables and
accrued liabilities
|
|
|
5,604
|
|
|
|
460
|
|
Value added and other
taxes payable
|
|
|
(2,210)
|
|
|
|
567
|
|
Income tax
payable
|
|
|
(54)
|
|
|
|
(238)
|
|
Net cash provided by
operating activities
|
|
|
2,562
|
|
|
|
14,924
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(12,182)
|
|
|
|
(8,564)
|
|
Net cash used in
investing activities
|
|
|
(12,182)
|
|
|
|
(8,564)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from bank
loans
|
|
|
64,006
|
|
|
|
62,693
|
|
Repayment of bank
loans
|
|
|
(70,513)
|
|
|
|
(56,296)
|
|
Repayment of loans
from related party
|
|
|
6,657
|
|
|
|
9,280
|
|
Advances to related
party
|
|
|
(8,428)
|
|
|
|
(7,119)
|
|
Interest income
received from related party
|
|
|
2,997
|
|
|
|
-
|
|
Net cash provided by
(used in) financing activities
|
|
|
(5,281)
|
|
|
|
8,558
|
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
|
|
(963)
|
|
|
|
2,670
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
(15,864)
|
|
|
|
17,588
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
62,876
|
|
|
|
45,288
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
|
47,012
|
|
|
$
|
62,876
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during
the period for:
|
|
|
|
|
|
|
|
|
Accrued interest
income on amounts due from related party under
counter-guarantee
agreement (Note 12)
|
|
$
|
738
|
|
|
$
|
818
|
|
Interest
|
|
$
|
1,755
|
|
|
$
|
1,648
|
|
Income
taxes
|
|
$
|
6,350
|
|
|
$
|
6,247
|
|
View original
content:http://www.prnewswire.com/news-releases/ever-glory-reports-fourth-quarter-2018-financial-results-300820903.html
SOURCE Ever-Glory International Group, Inc.