Ever-Glory Announced Results of Third Quarter Ended September 30, 2006, Posting 51% Revenue Gain Over Same Period Last Year Citing Increasing Sales to Europe and U.S.

Add: 2007 Update: 2009/03/22

LOS ANGELES, CA--(MARKET WIRE)--Feb 14, 2007 -- Ever-Glory International Group (OTC BB:EGLY.OB - News) today announced results for its fiscal quarter which ended September 30, 2006.

Third Quarter Results

Revenues for the quarter ended September 30, 2006 were $6,120,264, an increase of 51% from $4,060,499 for the same quarter in 2005. The increase in revenues was primarily attributable to an overall increase in sales to customers in Europe and the U.S. Sales to customers in Europe jumped by 154%, while sales to customers in U.S. increased by 6%, as compared to the same period in 2005. Income before taxes for the three months ended September 30, 2006 was $691,071, an increase of $148,825 from $542,246 for the same period in 2005, thanks to the impressive increase in net sales.

Cost of revenues for the quarter ended September 30, 2006 was $4,896,620, an increase of $1,462,805 from $3,433,815 for the quarter ended September 30, 2005. Cost of revenues primarily consisted of the purchase cost of materials, receiving and inspection costs, inbound freight, direct labor cost and manufacturing overheads. As a percentage of revenues, cost of revenues decreased to approximately 80% for the three months ended September 30, 2006 from approximately 85% for the quarter ended September 30, 2005. Consequently, gross margin as a percentage of revenues increased to approximately 20% for the three months ended September 30, 2006 from approximately 15% for the same period in 2005. The decrease in costs of sales and the increase of gross margin were primarily attributable to a 2.58% decrease in the purchase cost of materials and a 1.28% decrease in direct labor cost. The decrease in a percentage of revenues was mainly because of the decrease of the cost of collective purchasing raw materials for some sizeable orders from major customers.

Revenues for the nine months ended September 30, 2006 were $17,529,139, an increase of 155% from $6,880,370 for the same period in 2005, thanks to increased orders from major customers in Europe, U.S. and China. As of September 30, 2006, sales to customers in Europe soared by 232%, while sales to customers in the U.S. jumped 222% and sales to customers in China increased by 30% as compared to 2005. Income before taxes for the nine months ended September 30, 2006 was $1,610,788, an increase of $866,268 from $744,520 for the same period in 2005, mainly attributable to the increase in net sales.

In 2006, all Chinese manufacturers of certain garments were subject to aggregate export quotas, or limitations, to the United States and Europe. Companies were allocated a portion of the aggregate export quota based on their export performance in the prior year. As a result of its good export performance in the prior year, EGLY was allocated sufficient export quotas to enable it to increase its sales to customers in Europe and the U.S. Overall, the imposition of such quotas did not have a material effect on the Company's net sales, although it did impact its net margin. To increase its allocation of future export quotas, the company accepted more orders for lower margin products which negatively affected its gross margin but the increase in volume will help increase future export quota allocations.

"We believe that our company's current customer mix and our ability to adjust the types of apparel the company manufactures have helped and will continue to help mitigate our exposure to such trade restrictions," stated Mr. Edward Kang, President and CEO of Ever-Glory.

"While pleased with our current progress, we will continue to focus our efforts on internal growth and further integrate our recent acquisitions with the goal of realizing additional operating synergies," commented Mr. Edward Kang, President and CEO of Ever-Glory.

About Ever-Glory International Group

Ever-Glory International Group (OTC BB:EGLY.OB - News) is a U.S. publicly traded company engaged in international garment manufacturing for well-known middle to high-grade casual, outer, and sportswear brands. The company's U.S. headquarters is based in Los Angeles, CA, although Ever-Glory also owns a full subsidiary company, Nanjing Goldenway Garments Co. Ltd. located in China. Ever-Glory has strategic business partners in countries including China, Europe and the U.S. The Company cooperates with well-respected garment retailer chains such as Itochu, Shinko, Debenhams, Next, C&A, Itoyokado, etc. in handling high and middle grade casual-wear and sportswear. The company entered into production and sale cooperation agreements with a number of internationally famous brands such as Matalan, Eddie Bauer, Best-Seller, BB Dakota, etc. The company employs about 400 people. At present, the market distribution is segmented as 20% in Japan, 45% in Europe, 25% in United States and 5% in China.

For more information about Ever-Glory International Group, please visit: http://www.everglorygroup.com.

This press release contains certain "forward-looking statements," as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management's current expectations. Such factors are detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities.

Contact:

Ever-Glory International Group

Ms. Sarah Liu

(626) 839.9116

Email Contact

Source: Ever-Glory International Group

print bookmark login