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Ever-Glory Reports Third Quarter 2018 Financial Resultsnew

Add: 2018   Update: 2018/11/08

 

 
Ever-Glory Reports T Quarter 2018 Financial Results
NANJING, China, November 8, 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 third quarter ended September 30, 2018.gross marginThe solid third 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 Third Quarter 2018 Financial Results
Total sales for the third quarter of 2018 were $125.5 million, an increase of 4.3% from $120.3 million in the third quarter of 2017. This increase was primarily driven by an 24.2% increase in our wholesale business partially offset by a 22.4% decrease in retail business.
Sales for the Company’s branded fashion apparel retail division decreased by % to $million for the third quarter of 2018, compared with $million for the third quarter of 2017. This decrease was primarily due to a decrease in same-store sales. The Company had retail stores as of September 30, 2018, compared with retail stores as of September 30, 2017. Salesfor the Company’s wholesale divisioncreased by % to $million for the third quarter of 2018, compared with $million for the third quarter of 2017. This was primarily attributable to an increase in sales in Mainland China, Germany, the United Kingdom, Europe-Other, Japan, and the United States, partially offset by a decrease in sales in Hong Kong, China.
Total gross profit for the third quarter of 2018 creased by% to $million, compared with $million for the third quarter of 2017. Total gross margin decreased to % from % for the third quarter of 2017.
Gross profit for the retail business decreased by % to $million for the third quarter of 2018, compared with $million for the third quarter of 2017. Gross margin was %, compared to% for the third quarter of 2017.
Gross profitfor the wholesale business by % to $million for the third quarter of 2018, compared with $million for the third quarter of 2017. Gross margin creased to % from % for the third quarter of 2017.Selling expenses for the third quarter of 2018 decreased by % to $million, or % of total sales, compared with $million, or % of total salesfor the third quarter of 2017. The decrease was attributable to lower retail sales.
General and administrative expenses for the third quarter of 2018 creased by 16.2% to $million, or % of total sales,compared with $million, or % of total salesfor the third quarter of 2017. The decrease was mainly attributable to lower financial fees.
Income from operations for the third quarter of 2018 increased by 39.0% to $ million compared with $ million for the third quarter of 2017.
Net income attributable to the Company for the third quarter of 2018 was $3.3 million compared with 3.2 million for the third quarter of 2017. Basic and diluted earnings per share were $0.22 for the third quarter of 2018 with no change as that of the third quarter of 2017.
Balance Sheet
As of September 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 September 30, 2018, and outstanding bank loans of approximately $ million as of September 30, 2018.
Conference Call
The Company will hold a conference call at 7:00 a.m. Eastern Time on November 8, 2018(8:00 p.m. Beijing Time on November 8, 2018). Listeners can access the conference call by dialing +1-877-876-9174 or + 1-785-424-1669 and using the access code 132217. 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 8 through 11:59 p.m. Eastern Time on November 15, by dialing +1-844-512-2921 or +1-412-317-6671 and using the access code 132217.
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 SEPTEMBER 30, 2018 (UNAUDITED) AND DECEMBER 31, 2017
 

 
 
2018
 
 
2017
 
ASSETS
 
 
 
 
 
 
CURRENT ASSETS
 
 
 
 
 
 
Cash and cash equivalents
 
$
24,479
 
 
$
62,876
 
Accounts receivable, net
 
 
93,141
 
 
 
81,859
 
Inventories
 
 
83,243
 
 
 
56,182
 
Value added tax receivable
 
 
3,135
 
 
 
3,757
 
Other receivables and prepaid expenses
 
 
24,181
 
 
 
5,139
 
Advances on inventory purchases
 
 
10,998
 
 
 
3,028
 
Amounts due from related parties
 
 
25
 
 
 
265
 
Total Current Assets
 
 
239,202
 
 
 
213,106
 
 
 
 
 
 
 
 
 
 
INTANGIBLE ASSETS
 
 
6,337
 
 
 
5,995
 
PROPERTY AND EQUIPMENT, NET
 
 
26,746
 
 
 
25,891
 
TOTAL ASSETS
 
$
272,285
 
 
$
244,992
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
 
 
 
Bank loans
 
$
35,562
 
 
$
37,730
 
Accounts payable
 
 
99,399
 
 
 
73,788
 
Accounts payable and other payables - related parties
 
 
5,168
 
 
 
4,675
 
Other payables and accrued liabilities
 
 
29,560
 
 
 
16,454
 
Derivative financial instruments
 
 
1,073
 
 
 
-
 
Value added and other taxes payable
 
 
1,879
 
 
 
6,052
 
Income tax payable
 
 
1,931
 
 
 
1,712
 
Total Current Liabilities
 
 
174,572
 
 
 
140,411
 
 
 
 
 
 
 
 
 
 
NONCURRENT LIABILITIES
 
 
 
 
 
 
 
 
Deferred tax liabilities
 
 
95
 
 
 
1,883
 
TOTAL LIABILITIES
 
 
174,667
 
 
 
142,294
 
 
 
 
 
 
 
 
 
 
COMMITMENTS AND CONTINGENCIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
 
 
Common stock $0.001 par value, authorized 50,000,000 shares, 14,798,198 and 14,795,992 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively)
 
 
15
 
 
 
15
 
Additional paid-in capital
 
 
3,627
 
 
 
3,620
 
Retained earnings
 
 
102,102
 
 
 
95,195
 
Statutory reserve
 
 
17,794
 
 
 
17,794
 
Accumulated other comprehensive income
 
 
(4,240
)
 
 
2,585
 
Amounts due from related party
 
 
(20,252
)
 
 
(15,449
)
Total equity attributable to stockholders of the Company
 
 
99,046
 
 
 
103,760
 
Noncontrolling interest
 
 
(1,428
)
 
 
(1,062
)
Total Equity
 
 
97,618
 
 
 
102,698
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
272,285
 
 
$
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 NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017 (UNAUDITED)
 

 
 
Three months ended
 
 
Nine months ended
 
 
 
September 30,
 
 
September 30,
 
 
 
2018
 
 
2017
 
 
2018
 
 
2017
 
NET SALES
 
$
125,480
 
 
$
120,257
 
 
$
306,806
 
 
$
285,148
 
COST OF SALES
 
 
95,419
 
 
 
87,007
 
 
 
210,858
 
 
 
192,740
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GROSS PROFIT
 
 
30,061
 
 
 
33,250
 
 
 
95,948
 
 
 
92,408
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling expenses
 
 
17,588
 
 
 
20,238
 
 
 
62,405
 
 
 
60,206
 
General and administrative expenses
 
 
8,519
 
 
 
10,167
 
 
 
25,015
 
 
 
24,900
 
Total Operating Expenses
 
 
26,107
 
 
 
30,405
 
 
 
87,420
 
 
 
85,106
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME FROM OPERATIONS
 
 
3,954
 
 
 
2,845
 
 
 
8,528
 
 
 
7,302
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OTHER INCOME (EXPENSES)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
 
307
 
 
 
370
 
 
 
1,003
 
 
 
909
 
Interest expense
 
 
(278
)
 
 
(562
)
 
 
(1,202
)
 
 
(1,207
)
Other income
 
 
101
 
 
 
1,987
 
 
 
1,102
 
 
 
3,088
 
Total Other Income (Expenses)
 
 
130
 
 
 
1,795
 
 
 
903
 
 
 
2,790
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME BEFORE INCOME TAX EXPENSE
 
 
4,084
 
 
 
4,640
 
 
 
9,431
 
 
 
10,092
 
Income tax expense
 
 
(908
)
 
 
(1,522
)
 
 
(2,949
)
 
 
(3,573
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INCOME
 
 
3,176
 
 
 
3,118
 
 
 
6,482
 
 
 
6,519
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss attributable to the non-controlling interest
 
 
140
 
 
 
115
 
 
 
425
 
 
 
376
 
NET INCOME ATTRIBUTABLE TO THE COMPANY
 
 
3,316
 
 
 
3,233
 
 
 
6,907
 
 
 
6,895
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INCOME
 
$
3,176
 
 
$
3,118
 
 
$
6,482
 
 
$
6,519
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation income(loss)
 
 
(3,674
)
 
 
1,823
 
 
 
(5,742
)
 
 
3,345
 
Unrealized gain (loss) of derivative contracts designated as cash flow hedge
 
 
(614
)
 
 
-
 
 
 
(1,083
)
 
 
-
 
COMPREHENSIVE INCOME (LOSS)
 
 
(1,112
)
 
 
4,941
 
 
 
(343
)
 
 
9,864
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive loss attributable to the non-controlling interest
 
 
57
 
 
 
133
 
 
 
366
 
 
 
411
 
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY
 
$
(1,055
)
 
$
5,074
 
 
$
23
 
 
$
10,275
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS PER SHARE ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted
 
$
0.22
 
 
$
0.22
 
 
$
0.47
 
 
$
0.47
 
Weighted average number of shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted
 
 
14,798,198
 
 
 
14,792,836
 
 
 
14,796,527
 
 
 
14,791,778
 

 
 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, 2018 AND 2017 (UNAUDITED)
 

 
 
2018
 
 
2017
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
 
Net income
 
$
6,482
 
 
$
6,519
 
Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
6,523
 
 
 
5,066
 
Loss from sale of property and equipment
 
 
102
 
 
 
5
 
Provision of bad debt allowance
 
 
-
 
 
 
679
 
Provision for obsolete inventories
 
 
2,697
 
 
 
4,624
 
Deferred income tax
 
 
(1,706
)
 
 
(2,004
)
Stock-based compensation
 
 
7
 
 
 
10
 
Changes in operating assets and liabilities
 
 
 
 
 
 
 
 
Accounts receivable
 
 
(15,012
)
 
 
(12,805
)
Inventories
 
 
(32,831
)
 
 
(3,423
)
Value added tax receivable
 
 
430
 
 
 
(762
)
Other receivables and prepaid expenses
 
 
(19,792
)
 
 
(3,395
)
Advances on inventory purchases
 
 
(8,199
)
 
 
(1,619
)
Amounts due from related parties
 
 
4
 
 
 
(937
)
Accounts payable
 
 
29,547
 
 
 
(3,738
)
Accounts payable and other payables- related parties
 
 
153
 
 
 
232
 
Other payables and accrued liabilities
 
 
14,054
 
 
 
(2,219
)
Value added and other taxes payable
 
 
(3,892
)
 
 
(2,561
)
Income tax payable
 
 
311
 
 
 
(256
)
Net cash used in operating activities
 
 
(21,122
)
 
 
(16,584
)
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
Purchases of property and equipment
 
 
(9,144
)
 
 
(4,356
)
Net Cash used in by investing activities
 
 
(9,144
)
 
 
(4,356
)
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
Proceeds from bank loans
 
 
39,872
 
 
 
47,570
 
Repayment of bank loans
 
 
(40,225
)
 
 
(33,372
)
Repayment of loans from related party
 
 
3,232
 
 
 
7,596
 
Advances to related party
 
 
(8,183
)
 
 
(6,464
)
Net cash (used in) provided by financing activities
 
 
(5,304
)
 
 
15,330
 
 
 
 
 
 
 
 
 
 
EFFECT OF EXCHANGE RATE CHANGES ON CASH
 
 
(2,827
)
 
 
1,121
 
 
 
 
 
 
 
 
 
 
NET DECREASE IN CASH AND CASH EQUIVALENTS
 
 
(38,397
)
 
 
(4,489
)
 
 
 
 
 
 
 
 
 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
 
 
62,876
 
 
 
45,288
 
 
 
 
 
 
 
 
 
 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
 
$
24,479
 
 
$
40,799
 
 
 
 
 
 
 
 
 
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash paid during the period for:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest
 
$
1,202
 
 
$
645
 
Income taxes
 
$
4,427
 
 
$
3,120
 

 

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