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Ever-Glory Reports Second Quarter 2018 Financial Resultsnew

Add: 2018   Update: 2018/08/14

 

Ever-Glory Reports Second Quarter 2018 Financial Results
NANJING, China, August 14, 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 second quarter ended June 30, 2018.Second Quarter 2018 Financial Results
Total sales for the second quarter of 2018 were $88.5 million, an increase of 11.0% from $79.8 million in the second quarter of 2017. This increase was primarily driven by a 17.6% increase in our wholesale business and an 6.3% increase in retail business.
Sales for the Company’s branded fashion apparel retail division increased by % to $million for the second quarter of 2018, compared with $million for the second quarter of 2017. This increase was primarily due to an increase in same-store sales. The Company had retail stores as of June 30, 2018, compared with retail stores as of June 30, 2017. Salesfor the Company’s wholesale divisioncreased by % to $million for the second quarter of 2018, compared with $million for the second quarter of 2017. This was primarily attributable to an increase in sales in Mainland China, United Kingdom, United States and Japan, partially offset by a decrease in sales in Hong Kong, Germany and Europe other areas.
Total gross profit for the second quarter of 2018 creased by% to $million, compared with $million for the second quarter of 2017. Total gross margin increased to % from % for the second quarter of 2017.
Gross profit for the retail business increased by % to $million for the second quarter of 2018, compared with $million for the second quarter of 2017. Gross margin was %, compared to% for the second quarter of 2017.
Gross profitfor the wholesale business by % to $million for the second quarter of 2018, compared with $million for the second quarter of 2017. Gross margin creased to % from % for the second quarter of 2017.Selling expenses for the second quarter of 2018 increased by % to $million, or % of total sales, compared with $million, or % of total salesfor the second quarter of 2017. The increase was attributable to the increased store decoration and marketing expenses.
General and administrative expenses for the second quarter of 2018 creased by 18.0% to $million, or % of total sales,compared with $million, or % of total salesfor the second quarter of 2017. The increase was mainly attributable to the increased average salaries.
Income from operations for the second quarter of 2018 increased by 6.1% to $ million compared with $ million for the second quarter of 2017.
Net income attributable to the Company for the second quarter of 2018 was $2.8 million compared with 2.7 million for the second quarter of 2017. Basic and diluted earnings per share were $0.19 for the second quarter of 2018 compared with basic and diluted earnings per share of $0.18 for the second quarter of 2017.
Balance Sheet
As of June 30, 2018, Ever-Glory had approximately $million of cash and cash equivalents, compared with approximately $million as of December 31, 2017. Ever-Glory had working capital of approximately $million as of June 30, 2018, and outstanding bank loans of approximately $ million as of June 30, 2018.
Conference Call
The Company will hold a conference call at 8:00 a.m. Eastern Time on August 14, 2018(8:00 p.m. Beijing Time on August 14, 2018). Listeners can access the conference call by dialing +1-888-394-8218 or + 1-323-701-0225 and using the access code 3000953. 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 3000953.
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, 2018 (UNAUDITED) AND DECEMBER 31, 2017
 

 
 
2018
 
 
2017
 
ASSETS
 
 
 
 
 
 
CURRENT ASSETS
 
 
 
 
 
 
Cash and cash equivalents
 
$
36,439
 
 
$
62,876
 
Accounts receivable, net
 
 
61,072
 
 
 
81,859
 
Inventories
 
 
64,418
 
 
 
56,182
 
Value added tax receivable
 
 
3,037
 
 
 
3,757
 
Other receivables and prepaid expenses
 
 
13,771
 
 
 
5,139
 
Advances on inventory purchases
 
 
9,858
 
 
 
3,028
 
Amounts due from related parties
 
 
-
 
 
 
265
 
Total Current Assets
 
 
188,595
 
 
 
213,106
 
 
 
 
 
 
 
 
 
 
INTANGIBLE ASSETS
 
 
6,290
 
 
 
5,995
 
PROPERTY AND EQUIPMENT, NET
 
 
26,305
 
 
 
25,891
 
TOTAL ASSETS
 
$
221,190
 
 
$
244,992
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
 
 
 
Bank loans
 
$
34,768
 
 
$
37,730
 
Accounts payable
 
 
58,745
 
 
 
73,788
 
Accounts payable and other payables - related parties
 
 
4,448
 
 
 
4,675
 
Other payables and accrued liabilities
 
 
23,440
 
 
 
16,454
 
Derivative financial instruments
 
 
469
 
 
 
-
 
Value added and other taxes payable
 
 
245
 
 
 
6,052
 
Income tax payable
 
 
777
 
 
 
1,712
 
Total Current Liabilities
 
 
122,892
 
 
 
140,411
 
 
 
 
 
 
 
 
 
 
NONCURRENT LIABILITIES
 
 
 
 
 
 
 
 
Deferred tax liabilities
 
 
1,039
 
 
 
1,883
 
TOTAL LIABILITIES
 
 
123,931
 
 
 
142,294
 
 
 
 
 
 
 
 
 
 
COMMITMENTS AND CONTINGENCIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
 
 
Common stock $0.001 par value, authorized 50,000,000 shares, 14,795,992 and 14,795,992 shares issued and outstanding As of June 30, 2018 and December 31, 2017, respectively)
 
 
15
 
 
 
15
 
Additional paid-in capital
 
 
3,620
 
 
 
3,620
 
Retained earnings
 
 
98,786
 
 
 
95,195
 
Statutory reserve
 
 
17,794
 
 
 
17,794
 
Accumulated other comprehensive income
 
 
(48
)
 
 
2,585
 
Amounts due from related party
 
 
(21,589
)
 
 
(15,449
)
Total equity attributable to stockholders of the Company
 
 
98,578
 
 
 
103,760
 
Noncontrolling interest
 
 
(1,319
)
 
 
(1,062
)
Total Equity
 
 
97,259
 
 
 
102,698
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
221,190
 
 
$
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 SIX MONTHS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED)
 

 
 
Three months ended
 
 
Six months ended
 
 
 
June 30,
 
 
June 30,
 
 
 
2018
 
 
2017
 
 
2018
 
 
2017
 
NET SALES
 
$
88,541
 
 
$
79,771
 
 
$
181,326
 
 
$
164,891
 
COST OF SALES
 
 
53,999
 
 
 
49,121
 
 
 
115,439
 
 
 
105,732
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GROSS PROFIT
 
 
34,542
 
 
 
30,650
 
 
 
65,887
 
 
 
59,159
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling expenses
 
 
22,590
 
 
 
20,223
 
 
 
44,817
 
 
 
39,968
 
General and administrative expenses
 
 
8,823
 
 
 
7,479
 
 
 
16,496
 
 
 
14,734
 
Total Operating Expenses
 
 
31,413
 
 
 
27,702
 
 
 
61,313
 
 
 
54,702
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME FROM OPERATIONS
 
 
3,129
 
 
 
2,948
 
 
 
4,574
 
 
 
4,457
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OTHER INCOME (EXPENSES)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
 
370
 
 
 
282
 
 
 
696
 
 
 
539
 
Interest expense
 
 
(360
)
 
 
(318
)
 
 
(924
)
 
 
(645
)
Other income
 
 
865
 
 
 
523
 
 
 
1,001
 
 
 
1,100
 
Total Other Income, Net
 
 
875
 
 
 
487
 
 
 
773
 
 
 
994
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME BEFORE INCOME TAX EXPENSE
 
 
4,004
 
 
 
3,435
 
 
 
5,347
 
 
 
5,451
 
Income tax expense
 
 
(1,285
)
 
 
(833
)
 
 
(2,041
)
 
 
(2,050
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INCOME
 
 
2,719
 
 
 
2,602
 
 
 
3,306
 
 
 
3,401
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss attributable to the non-controlling interest
 
 
57
 
 
 
86
 
 
 
285
 
 
 
261
 
NET INCOME ATTRIBUTABLE TO THE COMPANY
 
 
2,776
 
 
 
2,688
 
 
 
3,591
 
 
 
3,662
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INCOME
 
$
2,719
 
 
$
2,602
 
 
$
3,306
 
 
$
3,401
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation (loss) gain
 
 
(6,091
)
 
 
1,063
 
 
 
(2,068
)
 
 
1,522
 
Unrealized gain (loss) of derivative contracts designated as cash flow hedge
 
 
(469
)
 
 
-
 
 
 
(469
)
 
 
-
 
COMPREHENSIVE INCOME (LOSS)
 
 
(3,841
)
 
 
3,665
 
 
 
769
 
 
 
4,923
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income(loss) attributable to the non-controlling interest
 
 
(13
)
 
 
98
 
 
 
309
 
 
 
278
 
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY
 
$
(3,854
)
 
$
3,763
 
 
$
1,078
 
 
$
5,201
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS PER SHARE ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted
 
$
0.19
 
 
$
0.18
 
 
$
0.24
 
 
$
0.25
 
Weighted average number of shares outstanding Basic and diluted
 
 
14,795,992
 
 
 
14,792,836
 
 
 
14,795,992
 
 
 
14,791,240
 

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, 2018 AND 2017 (UNAUDITED)
 

 
 
2018
 
 
2017
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
 
Net income
 
$
3,306
 
 
$
3,401
 
Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
4,903
 
 
 
3,481
 
Loss from sale of property and equipment
 
 
6
 
 
 
5
 
Provision of bad debt allowance
 
 
-
 
 
 
688
 
Provision for obsolete inventories
 
 
1,626
 
 
 
4,105
 
Deferred income tax
 
 
(843
)
 
 
(1,744
)
Stock-based compensation
 
 
-
 
 
 
10
 
Changes in operating assets and liabilities
 
 
 
 
 
 
 
 
Accounts receivable
 
 
20,150
 
 
 
13,865
 
Inventories
 
 
(10,873
)
 
 
(11,750
)
Value added tax receivable
 
 
681
 
 
 
(1,446
)
Other receivables and prepaid expenses
 
 
(8,942
)
 
 
(673
)
Advances on inventory purchases
 
 
(7,145
)
 
 
(2,684
)
Amounts due from related parties
 
 
1,117
 
 
 
(161
)
Accounts payable
 
 
(14,296
)
 
 
(7,542
)
Accounts payable and other payables- related parties
 
 
(1,485
)
 
 
(818
)
Other payables and accrued liabilities
 
 
8,006
 
 
 
(1,353
)
Value added and other taxes payable
 
 
(5,924
)
 
 
(4,048
)
Income tax payable
 
 
(942
)
 
 
(753
)
Net cash used in operating activities
 
 
(10,655
)
 
 
(7,417
)
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
Purchases of property and equipment
 
 
(6,295
)
 
 
(2,220
)
Net Cash (used in) provided by investing activities
 
 
(6,295
)
 
 
(2,220
)
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
Proceeds from bank loans
 
 
28,111
 
 
 
25,664
 
Repayment of bank loans
 
 
(30,533
)
 
 
(17,821
)
Repayment of loans from related party
 
 
2,556
 
 
 
482
 
Advances to related party
 
 
(8,734
)
 
 
(6,433
)
Net cash used in financing activities
 
 
(8,600
)
 
 
1,892
 
 
 
 
 
 
 
 
 
 
EFFECT OF EXCHANGE RATE CHANGES ON CASH
 
 
(887
)
 
 
310
 
 
 
 
　
 
 
 
　
 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
 
 
(26,437
)
 
 
(7,435
)
 
 
 
　
 
 
 
　
 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
 
 
62,876
 
 
 
45,288
 
 
 
 
　
 
 
 
　
 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
 
$
36,439
 
 
$
37,853
 
 
 
 
 
 
 
 
 
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash paid during the period for:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest
 
$
924
 
 
$
645
 
Income taxes
 
$
3,016
 
 
$
3,120
 

 

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