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Ever-Glory Reports Fourth Quarter 2020 Financial Resultsnew

Add: 2021   Update: 2021/03/31

Ever-Glory Reports Fourth Quarter 2020 Financial Results

NANJING, China, March 31, 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, 2020.

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 fourth quarter of 2020, 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 54 stores during 2020, we operated a nationwide network of 936 stores as of December 31, 2020.”

“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 2020 Financial Results

Total sales for the full year of 2020 were $267.4 million, a decrease of 30.2% from $383.1 million in the full year of 2019. This decrease was primarily driven by a 39.9% decrease in our wholesale business and a 20.1% decrease in retail business.

Sales for the Company’s branded fashion apparel retail division decreased by 20.1% to $150.1 million for the full year of 2020, compared with $187.9 million for the full year of 2019. This decrease was primarily due to a decrease in same store sales. The Company had 936 retail stores as of December 31, 2020, compared with 1,101 retail stores as of December 31, 2019.

Sales for the Company’s wholesale division decreased by 39.9% to $117.2 million for the full year of 2020, compared with $195.2 million for the full year of 2019. This decrease was primarily attributable to a decrease in sales in Mainland China, Hong Kong, Germany, Europe-Other, Japan, United States and United Kingdom.

Total gross profit for the full year of 2020 decreased by 23.2% to $91.2 million, compared with $118.8 million for the full year of 2019. Total gross margin increased to 34.1% from 31.0% for the full year of 2019.

Gross profit for the retail business decreased by 22.1% to $61.5 million for the full year of 2020, compared with $78.9 million for the full year of 2019. Gross margin was 40.9%, compared to 42.0% for the full year of 2019.

Gross profit for the wholesale business decreased by 25.4% to $29.7 million for the full year of 2020, compared with $39.9 million for the full year of 2019. Gross margin increased to 25.4% from 20.4% for the full year of 2019.

Selling expenses for the full year of 2020 decreased by 30.3% to $56.0 million, or 20.9% of total sales, compared with $80.2 million, or 20.9% of total sales for the full year of 2019. The decrease was attributable to lower retail sales.

General and administrative expenses for the full year of 2020 decreased by 11.2% to $31.2 million, or 11.7% of total sales, compared with $35.1 million, or 9.2% of total sales for the full year of 2019. The decrease was mainly attributable to the decline in number of stores.

Income from operations for the full year of 2020 increased by 19.5% to $4.1 million compared with $3.5 million for the full year of 2019.

Net income attributable to the Company for the full year of 2020 was $3.3 million compared with $1.3 million for the full year of 2019. Basic and diluted earnings  per share were $0.22 for the full year of 2020 compared with $0.09 for the full year of 2019.

Balance Sheet

As of December 31, 2020, Ever-Glory had approximately $81.9 million of cash and cash equivalents, compared with approximately $48.6 million as of December 31, 2019. Ever-Glory had working capital of approximately $59.3 million as of December 31, 2020, and outstanding bank loans of approximately $65.9 million as of December 31, 2020.

 

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on March 31, 2020 (8:00 p.m. Beijing Time on March 31, 2020). Listeners can access the conference call by dialing +1-800-289-0438 or + 1-323-794-2423 and using the access code 3008303. 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 call will be available from 11:00 a.m. Eastern Time on March 31 through 11:59 p.m. Eastern Time on April 7 by calling +1-844-512-2921 or +1-412-317-6671 with pin number 3008303.

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, 2020 AND 2019

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

81,865

 

 

$

48,551

 

Restricted cash

 

 

39,858

 

 

 

2,204

 

Trading securities

 

 

1,792

 

 

 

-

 

Accounts receivable, net

 

 

53,285

 

 

 

78,053

 

Inventories

 

 

53,893

 

 

 

67,355

 

Advances on inventory purchases

 

 

10,261

 

 

 

9,681

 

Value added tax receivable

 

 

1,244

 

 

 

2,495

 

Other receivables and prepaid expenses

 

 

5,479

 

 

 

5,293

 

Amounts due from related parties

 

 

567

 

 

 

123

 

Total Current Assets

 

 

248,244

 

 

 

213,755

 

 

 

 

 

 

 

 

 

 

NONCURRENT ASSETS

 

 

 

 

 

 

 

 

Equity security investment

 

 

3,932

 

 

 

-

 

Intangible assets, net

 

 

4,794

 

 

 

4,729

 

Property and equipment, net

 

 

32,164

 

 

 

28,812

 

Operating lease right-of-use assets

 

 

41,690

 

 

 

53,379

 

Deferred tax assets

 

 

902

 

 

 

996

 

Total Non-Current Assets

 

 

83,482

 

 

 

87,916

 

TOTAL ASSETS

 

$

331,726

 

 

$

301,671

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Bank loans

 

$

65,919

 

 

$

29,931

 

Accounts payable

 

 

67,762

 

 

 

72,418

 

Accounts payable and other payables – related parties

 

 

3,764

 

 

 

4,811

 

Other payables and accrued liabilities

 

 

16,073

 

 

 

19,137

 

Value added and other taxes payable

 

 

909

 

 

 

1,657

 

Income tax payable

 

 

1,062

 

 

 

1,142

 

Current operating lease liabilities

 

 

33,481

 

 

 

44,888

 

Total Current Liabilities

 

 

188,970

 

 

 

173,984

 

 

 

 

 

 

 

 

 

 

NONCURRENT LIABILITIES

 

 

 

 

 

 

 

 

Non-current operating lease liabilities

 

 

8,307

 

 

 

8,537

 

TOTAL LIABILITIES

 

 

197,277

 

 

 

182,521

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock ($0.001 par value, authorized 50,000,000 shares, 14,809,160 and 14,801,770 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively)

 

 

15

 

 

 

15

 

Additional paid-in capital

 

 

3,650

 

 

 

3,640

 

Retained earnings

 

 

109,171

 

 

 

106,328

 

Statutory reserve

 

 

20,376

 

 

 

19,939

 

Accumulated other comprehensive income (loss)

 

 

4,590

 

 

 

(4,330

)

Amounts due from related party

 

 

(3,353

)

 

 

(4,932

)

Total equity attributable to stockholders of the Company

 

 

134,449

 

 

 

120,660

 

Noncontrolling interest

 

 

-

 

 

 

(1,510

)

Total Equity

 

 

134,449

 

 

 

119,150

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

331,726

 

 

$

301,671

 

 

 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, 2020 AND 2019

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

SALES

 

$

267,354

 

 

$

383,101

 

 

 

 

 

 

 

 

 

 

COST OF SALES

 

 

176,141

 

 

 

264,330

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

91,213

 

 

 

118,771

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

Selling expenses

 

 

55,894

 

 

 

80,180

 

General and administrative expenses

 

 

31,176

 

 

 

35,123

 

Total operating expenses

 

 

87,070

 

 

 

115,303

 

 

 

 

　 

 

 

 

　 

 

INCOME FROM OPERATIONS

 

 

4,143

 

 

 

3,468

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

Interest income

 

 

1,014

 

 

 

1,003

 

Interest expense

 

 

(2,345

)

 

 

(1,222

)

Loss on deconsolidation of a subsidiary

 

 

(1,085

)

 

 

-

 

Gain from changes in fair values of investments

 

 

950

 

 

 

-

 

Government subsidy

 

 

1,235

 

 

 

1,809

 

Other income

 

 

1,830

 

 

 

723

 

Total other income

 

 

1,599

 

 

 

2,313

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX EXPENSE

 

 

5,742

 

 

 

5,781

 

 

 

 

 

 

 

 

 

 

INCOME TAX EXPENSE

 

 

(2,469

)

 

 

(4,562

)

 

 

 

 

 

 

 

 

 

NET INCOME

 

 

3,273

 

 

 

1,219

 

 

 

 

 

 

 

 

 

 

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

 

 

7

 

 

 

51

 

NET INCOME ATTRIBUTABLE TO THE COMPANY

 

$

3,280

 

 

$

1,270

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

3,273

 

 

$

1,219

 

Foreign currency translation income (loss)

 

 

8,920

 

 

 

(660

)

COMPREHENSIVE INCOME

 

$

12,193

 

 

$

559

 

 

 

 

 

 

 

 

 

 

Comprehensive (loss) income attributable to the noncontrolling interest

 

 

7

 

 

 

41

 

 

 

 

 

 

 

 

 

 

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY

 

$

12,200

 

 

$

610

 

EARNINGS PER SHARE ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.22

 

 

$

0.09

 

Weighted average number of shares outstanding Basic and diluted

 

 

14,806,778

 

 

 

14,801,770

 

 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, 2020 AND 2019

 

 

 

 

 

 

 

 

 

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, 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

 

 

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

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,422

 

 

 

5,422

 

 

 

-

 

 

 

5,422

 

Foreign currency translation (loss) 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock issued for compensation

 

 

7,390

 

 

 

-

 

 

 

10

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

10

 

 

 

 

 

 

 

10

 

Net income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,280

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,280

 

 

 

(7

)

 

 

3,273

 

Transfer to reserve

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(437

)

 

 

437

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

Net cash paid to related party under counter guarantee agreement (Note 11)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,579

 

 

 

1,579

 

 

 

-

 

 

 

1,579

 

Deconsolidation of Yiduo

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,517

 

 

 

1,517

 

Foreign currency translation gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,920

 

 

 

 

 

 

 

8,920

 

 

 

-

 

 

 

8,920

 

Balance at December 31, 2020

 

 

14,809,160

 

 

$

15

 

 

$

3,650

 

 

$

109,171

 

 

$

20,376

 

 

$

4,590

 

 

$

(3,353

)

 

$

134,449

 

 

$ 

-

 

 

$

134,449

 

 


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, 2020 AND 2019

 

 

 

2020

 

 

2019

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net income

 

$

3,273

 

 

$

1,219

 

Adjustments to reconcile net (loss) income to cash provided by operating activities:

 

 

　

 

 

 

　

 

Depreciation and amortization

 

 

5,291

 

 

 

8,239

 

Loss from sale of property and equipment

 

 

209

 

 

 

9

 

Loss on deconsolidation of a subsidiary

 

 

1,085

 

 

 

-

 

Provision of bad debt allowance

 

 

1,117

 

 

 

1,062

 

Provision for obsolete inventories

 

 

6,753

 

 

 

2,804

 

Changes in fair value of trading securities

 

 

(131

)

 

 

-

 

Changes in fair value of investment

 

 

(819

)

 

 

-

 

Deferred income tax

 

 

154

 

 

 

(1,472

)

Stock-based compensation

 

 

10

 

 

 

12

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Accounts receivable

 

 

27,173

 

 

 

6,652

 

Inventories

 

 

10,161

 

 

 

(5,145

)

Value added tax receivable

 

 

1,336

 

 

 

1,077

 

Other receivables and prepaid expenses

 

 

(135

)

 

 

2,394

 

Advances on inventory purchases

 

 

(28

)

 

 

(3,395

)

Amounts due from related parties

 

 

(480

)

 

 

67

 

Accounts payable

 

 

(9,316

)

 

 

(2,305

)

Accounts payable and other payables- related parties

 

 

(1,145

)

 

 

176

 

Other payables and accrued liabilities

 

 

(3,098

)

 

 

(4,052

)

Value added and other taxes payable

 

 

(806

)

 

 

(2,948

)

Income tax payable

 

 

(148

)

 

 

(409

)

Net cash provided by operating activities

 

 

40,456

 

 

 

3,985

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(6,354

)

 

 

(8,675

)

Purchases of trading securities

 

 

(2,644

)

 

 

-

 

Proceeds from trading securities

 

 

979

 

 

 

-

 

Investment in a partnership

 

 

(2,936

)

 

 

-

 

Net cash used in investing activities

 

 

(10,955

)

 

 

(8,675

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from bank loans

 

 

90,729

 

 

 

59,528

 

Repayment of bank loans

 

 

(58,658

)

 

 

(58,665

)

Net collection (advance) of amounts due from related party (equity)

 

 

1,848

 

 

 

5,254

 

Net cash provided by financing activities

 

 

33,919

 

 

 

6,117

 

 

 

 

 

 

 

 

 

 

EFFECT OF EXCHANGE RATE CHANGES ON CASH

 

 

7,548

 

 

 

2,316

 

 

 

 

　

 

 

 

　

 

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

70,968

 

 

 

3,743

 

 

 

 

　

 

 

 

　

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD

 

 

50,755

 

 

 

47,012

 

 

 

 

　

 

 

 

　

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

 

$

121,723

 

 

$

50,755

 

 

 

 

 

 

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash reported within their consolidated balance sheets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

 

81,865

 

 

 

48,551

 

Restricted cash

 

 

39,858

 

 

 

2,204

 

 

 

$

121,723

 

 

$

50,755

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

 Net asset (liabilities) derecognized due to deconsolidation of a subsidiary

 

 

1,164

 

 

 

-

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

Interest

 

$

2,345

 

 

$

1,222

 

Income taxes

 

$

2,469

 

 

$

6,327

 

 

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