▌ News Releases

Ever-Glory Reports Second Quarter 2019 Financial Resultsnew

Add: 2019   Update: 2019/08/15

 

Ever-Glory Reports Second Quarter 2019 Financial Results

NANJING, China, August 14, 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 second quarter ended June 30, 2019.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, “During the second 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 second quarter of 2019, 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 39 stores during 2019, we operated a nationwide network of 1,235 stores as of June 30, 2019.”

“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 second 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.”

Second Quarter 2019 Financial Results

Total sales for the second quarter of 2019 were $77.3 million, a decrease of 12.7% from $88.5 million in the second quarter of 2018. This decrease was primarily driven by an 19.4% decrease in our retail business and a 4.0% decrease in wholesale business.

Sales for the Company’s branded fashion apparel retail division decreased by 19.4% to $40.1 million for the second quarter of 2019, compared with $49.7 million for the second quarter of 2018. This decrease was primarily due to a decrease in the amounts of stores and same-store sales. The Company had 1,235 retail stores as of June 30, 2019, compared with 1,417 retail stores as of June 30, 2018.

Sales for the Company’s wholesale division decreased by 4.0% to $37.3 million for the second quarter of 2019, compared with $38.8 million for the second quarter of 2018. This decrease was primarily attributable to decreased sales in Mainland China, Hong Kong China, Japan, Germany, United Kingdom and other European markets partially offset for increased sales in the United States.

Total gross profit for the second quarter of 2019 decreased by 16.1% to $29.0 million, compared with $34.5 million for the second quarter of 2018. Total gross margin decreased to 37.5% from 39.0% for the second quarter of 2018.

Gross profit for the retail business decreased by 16.1% to $23.0 million for the second quarter of 2019, compared with $27.4 million for the second quarter of 2018. Gross margin was 57.3%, compared to 55.1% for the second quarter of 2018.

Gross profit for the wholesale business decreased by 16.0% to $6.0 million for the second quarter of 2019, compared with $7.2 million for the second quarter of 2018. Gross margin decreased to 16.1% from 18.4% for the second quarter of 2018.

Selling expenses for the second quarter of 2019 decreased by 12.8% to $19.7 million, or 25.5% of total sales, compared with $22.6 million, or 25.5% of total sales for the second quarter of 2018. The decrease was attributable to the marketing expenses associated with the promotion of the retail brand.

General and administrative expenses for the second quarter of 2019 decreased by 16.8% to $7.3 million, or 9.5% of total sales, compared with $8.8 million, or 10.0% of total sales for the second quarter of 2018. The decrease was mainly attributable to the decline in number of stores.

Income from operations for the second quarter of 2019 decreased by 37.7% to $2.0 million compared with $3.1 million for the second quarter of 2018.

Net income attributable to the Company for the second quarter of 2019 was $1.9 million compared with $2.8 million for the second quarter of 2018. Basic and diluted earnings per share were $0.13 for the second quarter of 2019 compared with $0.19 for the second quarter of 2018.

Balance Sheet

As of June 30, 2019, Ever-Glory had approximately $34.5 million of cash and cash equivalents, compared with approximately $47.0 million as of December 31, 2018. Ever-Glory had working capital of approximately $42.6 million as of June 30, 2019, and outstanding bank loans of approximately $26.0 million as of June 30, 2019.

 

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on August 14, 2019 (8:00 p.m. Beijing Time on August 14, 2019). Listeners can access the conference call by dialing +1-800-289-0438 or + 1-323-794-2423 and using the access code 5902045. 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 5902045.

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, 2019 AND DECEMBER 31, 2018 (UNAUDITED)

 

 

 

2019

 

 

2018

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

34,526

 

 

$

47,012

 

Accounts receivable, net

 

 

64,704

 

 

 

86,527

 

Inventories

 

 

63,127

 

 

 

65,929

 

Advances on inventory purchases

 

 

8,754

 

 

 

6,420

 

Value added tax receivable

 

 

3,102

 

 

 

2,580

 

Other receivables and prepaid expenses

 

 

6,648

 

 

 

10,204

 

Amounts due from related parties

 

 

144

 

 

 

192

 

Total Current Assets

 

 

181,005

 

 

 

218,864

 

 

 

 

 

 

 

 

 

 

NONCURRENT ASSETS

 

 

 

 

 

 

 

 

Intangible assets, net

 

 

4,886

 

 

 

4,962

 

Property and equipment, net

 

 

28,245

 

 

 

28,445

 

Operating lease right-of-use assets

 

 

51,623

 

 

 

-

 

Total Non-Current Assets

 

 

84,754

 

 

 

33,407

 

TOTAL ASSETS

 

$

265,759

 

 

$

252,271

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Bank loans

 

$

25,999

 

 

$

29,497

 

Accounts payable

 

 

50,352

 

 

 

78,412

 

Accounts payable and other payables – related parties

 

 

4,796

 

 

 

4,756

 

Other payables and accrued liabilities

 

 

12,665

 

 

 

21,958

 

Value added and other taxes payable

 

 

-

 

 

 

2,569

 

Income tax payable

 

 

1,774

 

 

 

1,569

 

Current operating lease liabilities

 

 

42,808

 

 

 

-

 

Total Current Liabilities

 

 

138,394

 

 

 

138,761

 

 

 

 

 

 

 

 

 

 

NONCURRENT LIABILITIES

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

-

 

 

 

354

 

Non-current operating lease liabilities

 

 

8,839

 

 

 

-

 

TOTAL LIABILITIES

 

 

147,233

 

 

 

139,115

 

 

 

 

 

 

 

 

 

 

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, 14,800,140 and 14,798,198 shares issued and outstanding As of June 30, 2019 and December 31, 2018, respectively)

 

 

15

 

 

 

15

 

Additional paid-in capital

 

 

3,635

 

 

 

3,627

 

Retained earnings

 

 

107,249

 

 

 

105,914

 

Statutory reserve

 

 

19,083

 

 

 

19,083

 

Accumulated other comprehensive income

 

 

(2,093

)

 

 

(3,578

)

Amounts due from related party

 

 

(7,863

)

 

 

(10,354

)

Total equity attributable to stockholders of the Company

 

 

120,026

 

 

 

114,707

 

Noncontrolling interest

 

 

(1,500

)

 

 

(1,551

)

Total Equity

 

 

118,526

 

 

 

113,156

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

265,759

 

 

$

252,271

 

 

 

 

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, 2019 AND 2018 (UNAUDITED)

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

NET SALES

 

$

77,316

 

 

$

88,541

 

 

$

165,272

 

 

$

181,326

 

COST OF SALES

 

 

48,330

 

 

 

53,999

 

 

 

106,928

 

 

 

115,439

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

28,986

 

 

 

34,542

 

 

 

58,344

 

 

 

65,887

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

 

19,699

 

 

 

22,590

 

 

 

40,706

 

 

 

44,817

 

General and administrative expenses

 

 

7,337

 

 

 

8,823

 

 

 

14,867

 

 

 

16,496

 

Total Operating Expenses

 

 

27,036

 

 

 

31,413

 

 

 

55,573

 

 

 

61,313

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

 

1,950

 

 

 

3,129

 

 

 

2,771

 

 

 

4,574

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSES)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

277

 

 

 

370

 

 

 

484

 

 

 

696

 

Interest expense

 

 

(408

)

 

 

(360

)

 

 

(771

)

 

 

(924

)

Other income

 

 

1,409

 

 

 

865

 

 

 

1,114

 

 

 

1,001

 

Total Other Income, Net

 

 

1,278

 

 

 

875

 

 

 

827

 

 

 

773

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX EXPENSE

 

 

3,228

 

 

 

4,004

 

 

 

3,598

 

 

 

5,347

 

Income tax expense

 

 

(1,455

)

 

 

(1,285

)

 

 

(2,280

)

 

 

(2,041

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

 

1,773

 

 

 

2,719

 

 

 

1,318

 

 

 

3,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to the non-controlling interest

 

 

83

 

 

 

57

 

 

 

17

 

 

 

285

 

NET INCOME ATTRIBUTABLE TO THE COMPANY

 

 

1,856

 

 

 

2,776

 

 

 

1,335

 

 

 

3,591

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

1,773

 

 

$

2,719

 

 

$

1,318

 

 

$

3,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation (loss) gain

 

 

(2,487

)

 

 

(6,091

)

 

 

1,485

 

 

 

(2,068

)

Unrealized loss of derivative contracts designated as cash flow hedge

 

 

-

 

 

 

(469

)

 

 

-

 

 

 

(469

)

COMPREHENSIVE INCOME (LOSS)

 

 

(714

)

 

 

(3,841

)

 

 

2,803

 

 

 

769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

(48

)

 

 

(13

)

 

 

52

 

 

 

309

 

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY

 

$

(762

)

 

$

(3,854

)

 

$

2,855

 

 

$

1,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.13

 

 

$

0.19

 

 

$

0.09

 

 

$

0.24

 

Weighted average number of shares outstanding Basic and diluted

 

 

14,800,140

 

 

 

14,795,992

 

 

 

14,800,140

 

 

 

14,795,992

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018 (UNAUDITED)

 

 

 

 

 

 

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

 

 

1,942

 

 

 

0.004

 

 

 

8

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

8

 

 

 

 

 

 

 

8

 

Net income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(521

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(521

)

 

 

66

 

 

 

(455

)

Net cash received from related party under counter guarantee agreement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,101

 

 

 

1,101

 

 

 

-

 

 

 

1,101

 

Foreign currency translation gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,972

 

 

 

-

 

 

 

3,972

 

 

 

34

 

 

 

4,006

 

Balance at March 31, 2019

 

 

14,800,140

 

 

 

15

 

 

 

3,635

 

 

 

105,393