▌ News Releases

Ever-Glory Reports First Quarter 2020 Financial Resultsnew

Add: 2020   Update: 2020/05/15

 

Ever-Glory Reports First Quarter 2020 Financial Results

NANJING, China, May 15, 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 first quarter ended March 31, 2020.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, “During the first 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 first 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 2 stores during 2020, we operated a nationwide network of 1,038 stores as of March 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 first 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.”

First Quarter 2020 Financial Results

Total sales for the first quarter of 2020 were $58.4 million, a decrease of 33.7% from $88.0 million in the first quarter of 2019. This decrease was primarily driven by a 20.7% decrease in our wholesale business and a 39.7% decrease in our retail business.

Sales for the Company’s wholesale division decreased by 20.7% to $22.3 million for the first quarter of 2020, compared with       $28.1 million for the first quarter of 2019. This decrease was primarily attributable to decreased sales in Mainland China, Germany, other European markets and Japan partially offset for increased sales in Hong Kong, the United States and the United Kingdom.

Sales for the Company’s branded fashion apparel retail division decreased by 39.7% to $36.1 million for the first quarter of 2020, compared with $59.9 million for the first quarter of 2019. This decrease was primarily due to a decrease in same-store sales. The Company had 1,038 retail stores as of March 31, 2020, compared with 1,315 retail stores as of March 31, 2019.

Total gross profit for the first quarter of 2020 decreased by 45.4% to $16.0 million, compared with $29.4 million for the first quarter of 2019. Total gross margin decreased to 27.5% from 33.4% for the first quarter of 2019.

Gross profit for the wholesale business increased by 46.7% to $3.5 million for the first quarter of 2020, compared with $6.6 million for the first quarter of 2019. Gross margin decreased to 15.7% from 23.3% for the first quarter of 2019.

Gross profit for the retail business decreased by 45.0% to $12.5 million for the first quarter of 2020, compared with $22.8 million for the first quarter of 2019. Gross margin was 34.8%, compared to 38.1% for the first quarter of 2019.

Selling expenses for the first quarter of 2020 decreased by 35.8% to $13.5 million, or 23.1% of total sales, compared with $21.0 million, or 23.9% of total sales for the first quarter of 2019. The decrease was attributable to the decreased sales.

General and administrative expenses for the first quarter of 2020 decreased by 23.2% to $5.8 million, or 9.9% of total sales, compared with $7.5 million, or 8.6% of total sales for the first quarter of 2019. The decrease was mainly attributable to the decreased office expenses.

(Loss) Income from operations for the first quarter of 2020 decreased by 493.0% to ($3.2) million compared with $0.8 million for the first quarter of 2019.

Net loss attributable to the Company for the first quarter of 2020 was $2.7 million compared with $0.5 million for the first quarter of 2019. Basic and diluted loss per share were $0.18 for the first quarter of 2020 compared with basic and diluted earnings per share of  $0.04 for the first quarter of 2019.

Balance Sheet

As of March 31, 2020, Ever-Glory had approximately $70.0 million of cash and cash equivalents, compared with approximately $48.6 million as of December 31, 2019. Ever-Glory had working capital of approximately $49.3 million as of March 31, 2020, and outstanding bank loans of approximately $26.1 million as of March 31, 2020.

 

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on May 15, 2020 (8:00 p.m. Beijing Time on May 15, 2020). Listeners can access the conference call by dialing +1-800-263-0877 or + 1-646-828-8143 and using the access code 2134878. 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 May 15 through 11:59 p.m. Eastern Time on May 22, by dialing +1-844-512-2921 or +1-412-317-6671 and using the access code 2134878.

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 MARCH 31, 2020 AND DECEMBER 31, 2019 (UNAUDITED)

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

70,036

 

 

$

48,551

 

Accounts receivable, net

 

 

42,265

 

 

 

78,053

 

Inventories

 

 

52,152

 

 

 

67,355

 

Advances on inventory purchases

 

 

1,248

 

 

 

2,495

 

Value added tax receivable

 

 

6,961

 

 

 

7,497

 

Other receivables and prepaid expenses

 

 

6,723

 

 

 

9,681

 

Amounts due from related parties

 

 

102

 

 

 

123

 

Total Current Assets

 

 

179,487

 

 

 

213,755

 

 

 

 

 

 

 

 

 

 

NONCURRENT ASSETS

 

 

 

 

 

 

 

 

Intangible assets, net

 

 

4,529

 

 

 

4,729

 

Property and equipment, net

 

 

26,886

 

 

 

28,812

 

Operating lease right-of-use assets

 

 

42,583

 

 

 

53,379

 

Deferred tax assets

 

 

878

 

 

 

996

 

Total Non-Current Assets

 

 

74,876

 

 

 

87,916

 

TOTAL ASSETS

 

$

254,363

 

 

$

301,671

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Bank loans

 

$

26,104

 

 

$

29,931

 

Accounts payable

 

 

52,173

 

 

 

72,418

 

Accounts payable and other payables – related parties

 

 

3,889

 

 

 

4,811

 

Other payables and accrued liabilities

 

 

13,033

 

 

 

19,137

 

Value added and other taxes payable

 

 

598

 

 

 

1,657

 

Income tax payable

 

 

121

 

 

 

1,142

 

Current operating lease liabilities

 

 

34,315

 

 

 

44,888

 

Total Current Liabilities

 

 

130,233

 

 

 

173,984

 

 

 

 

 

 

 

 

 

 

NONCURRENT LIABILITIES

 

 

 

 

 

 

 

 

Non-current operating lease liabilities

 

 

8,325

 

 

 

8,537

 

TOTAL LIABILITIES

 

 

138,558

 

 

 

182,521

 

 

 

 

 

 

 

 

 

 

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, 14,804,832 and 14,801,770 shares issued and outstanding As of March 31, 2020 and December 31, 2019, respectively)

 

 

15

 

 

 

15

 

Additional paid-in capital

 

 

3,645

 

 

 

3,640

 

Retained earnings

 

 

103,627

 

 

 

106,328

 

Statutory reserve

 

 

19,939

 

 

 

19,939

 

Accumulated other comprehensive loss

 

 

(5,770

)

 

 

(4,330

)

Amounts due from related party

 

 

(4,147

)

 

 

(4,932

)

Total equity attributable to stockholders of the Company

 

 

117,309

 

 

 

120,660

 

Noncontrolling interest

 

 

(1,504

)

 

 

(1,510

)

Total Equity

 

 

115,805

 

 

 

119,150

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

254,363

 

 

$

301,671

 

 


EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES CONDENSED

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE LOSS (INCOME)
(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019 (UNAUDITED)

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

SALES

 

$

58,355

 

 

$

87,956

 

 

 

 

 

 

 

 

 

 

COST OF SALES

 

 

42,317

 

 

 

58,598

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

16,038

 

 

 

29,358

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

Selling expenses

 

 

13,478

 

 

 

21,008

 

General and administrative expenses

 

 

5,785

 

 

 

7,529

 

Total operating expenses

 

 

19,263

 

 

 

28,537

 

 

 

 

   

 

 

 

   

 

(LOSS) INCOME FROM OPERATIONS

 

 

(3,225

)

 

 

821

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

Interest income

 

 

277

 

 

 

207

 

Interest expense

 

 

(341

)

 

 

(363

)

Other income (expense), net

 

 

818

 

 

 

(295

)

Total other income (expense), net

 

 

754

 

 

 

(451

)

 

 

 

 

 

 

 

 

 

(LOSS) INCOME BEFORE INCOME TAX

 

 

(2,471

)

 

 

370

 

 

 

 

 

 

 

 

 

 

INCOME TAX EXPENSE

 

 

(227

)

 

 

(825

)

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

(2,698

)

 

 

(455

)

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

 

 

(3

)

 

 

(66

)

NET LOSS ATTRIBUTABLE TO THE COMPANY

 

$

(2,701

)

 

$

(521

)

 

 

 

 

 

 

 

 

 

NET LOSS

 

$

(2,698

)

 

$

(455

)

Foreign currency translation gain (loss)

 

 

(1,437

)

 

 

4,006

 

COMPREHENSIVE (LOSS) INCOME

 

$

(4,135

)

 

$

3,551

 

 

 

 

 

 

 

 

 

 

Comprehensive loss attributable to the noncontrolling interest

 

 

6

 

 

 

100

 

 

 

 

 

 

 

 

 

 

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY

 

$

(4,129

)

 

$

3,651

 

EARNINGS (LOSS) PER SHARE:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.18

)

 

$

(0.04

)

Weighted average number of shares outstanding Basic and diluted

 

 

14,804,832

 

 

 

14,800,140

 

 


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 MONTHS ENDED March 31, 2020 AND 2019 (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

 

 

loss

 

 

party

 

 

Company

 

 

Interest

 

 

equity

 

Balance at January 1, 2020

 

 

14,801,770

 

 

$

15

 

 

$

3,640

 

 

$

106,328

 

 

$

19,939

 

 

$

(4,330

)

 

$

(4,932

)

 

$

120,660

 

 

 

(1,510

)

 

$

119,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

3,062

 

 

 

0.003

 

 

 

5

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5

 

 

 

 

 

 

 

5

 

Net income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,701

)

 

 

 

 

 

 

-

 

 

 

-

 

 

 

(2,701

)

 

 

3

 

 

 

(2,698

)

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

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

785

 

 

 

785

 

 

 

-

 

 

 

785

 

Foreign currency translation income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,440

)

 

 

-

 

 

 

(1,440

)

 

 

3

 

 

 

(1,437

)

Balance at March 31, 2020

 

 

14,804,832

 

 

$

15

 

 

$

3,645

 

 

$

103,627

 

 

$

19,939

 

 

$

(5,770

)

 

$

(4,147

)

 

$

117,309

 

 

 

(1,504

)

 

$

115,805

 

 

 

 

 

 

 

 

 

 

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-based compensation

 

 

1,942

 

 

 

0.004

 

 

 

8

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

8

 

 

 

 

 

 

 

8

 

Net (loss) income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(521

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(521

)

 

 

66

 

 

 

(455

)

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

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,101

 

 

 

1,101

 

 

 

-

 

 

 

1,101

 

Foreign currency translation income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,972

 

 

 

-

 

 

 

3,972

 

 

 

34

 

 

 

4,006

 

Balance at March 31, 2019

 

 

14,800,140

 

 

$

15

 

 

$

3,635

 

 

$

105,393

 

 

$

19,083

 

 

$

394

 

 

$

(9,253

)

 

$

119,267

 

 

 

(1,451

)

 

$

117,816

 

 


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 THREE MONTHS ENDED MARCH 31, 2020 AND 2019 (UNAUDITED)

 

 

 

2020

 

 

2019

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$

(2,698

)

 

$

(455

)

Adjustments to reconcile net loss to cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,587

 

 

 

2,225

 

Gain on disposal of intangible assets

 

 

(268

)

 

 

-

 

Loss from sale of property and equipment

 

 

102

 

 

 

52

 

Provision of bad debt allowance

 

 

278

 

 

 

-

 

Provision for obsolete inventories

 

 

4,204

 

 

 

1,824

 

Deferred income tax

 

 

104

 

 

 

(145

)

Stock-based compensation

 

 

5

 

 

 

8

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Accounts receivable

 

 

34,906

 

 

 

31,027

 

Inventories

 

 

10,303

 

 

 

10,557

 

Value added tax receivable

 

 

210

 

 

 

1,406

 

Other receivables and prepaid expenses

 

 

364

 

 

 

3,975

 

Advances on inventory purchases

 

 

2,855

 

 

 

490

 

Amounts due from related parties

 

 

142

 

 

 

103

 

Accounts payable

 

 

(19,864

)

 

 

(26,505

) 

Accounts payable and other payables- related parties

 

 

(1,038

)

 

 

(741

)

Other payables and accrued liabilities

 

 

(5,587

)

 

 

(9,565

)

Value added and other taxes payable

 

 

(31

)

 

 

(2,788

)

Income tax payable

 

 

(1,019

)

 

 

(327

)

Net cash provided by operating activities

 

 

24,555

 

 

 

11,141

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES