▌ News Releases

Ever-Glory Reports First Quarter 2022 Financial Resultsnew

Add: 2022   Update: 2022/05/13

 NANJING, China, May 13, 2022 /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, 2022.

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 2022, 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 50-100 stores during 2022, we operated a nationwide network of 848 stores as of March 31, 2022.”

“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 2022 Financial Results 

Total sales for the first quarter of 2022 were $64.8 million,  a decrease of 8.5% from $70.8 million in the first quarter of 2021. This decrease was primarily attributable to a 28.7% increase in our wholesale business and a 26.7% decrease in our retail business.

Sales for the Company’s branded fashion apparel retail division decreased by 26.7% to $34.9 million for the first quarter of 2022, compared with $47.6 million for the first quarter of 2021. This decrease was primarily due to the decrease in same-store sales. The Company had 848 retail stores as of March 31, 2022, compared with 921 retail stores as of March 31, 2021.

Sales for the Company’s wholesale division increased by 28.7% to $29.9 million for the first quarter of 2022, compared with $23.2 million for the first quarter of 2021. This increase was primarily attributable to increased sales in Mainland China, Hong Kong, Japan and the United States, and other European markets partially offset by decreased sales in the United Kingdom.

Total gross profit for the first quarter of 2021 decreased by 22.6% to $17.4 million, compared with $22.4 million for the first quarter of 2021. Total gross margin for the first quarter of 2022 decreased to 26.8% from 31.7% for the first quarter of 2021.

Gross profit for the retail business decreased by 34.8% to $11.7 million for the first quarter of 2022, compared with $17.9 million for the first quarter of 2021. Gross margin for the first quarter of 2022 was 33.4% compared to 37.6% for the first quarter of 2021.

Gross profit for the wholesale business increased by 25.2% to $5.7 million for the first quarter of 2022, compared with $4.6 million for the first quarter of 2021. Gross margin for the first quarter of 2022 decreased to 19.1% from 19.6% for the first quarter of 2021.

Selling expenses for the first quarter of 2022 decreased by 12.0% to $13.7 million, or 21.1% of total sales, compared with $15.5 million, or 22.0% of total sales for the first quarter of 2021. The decrease was attributable to the decreased salaries.

General and administrative expenses for the first quarter of 2022 decreased by 10.9% to $7.0 million, or 10.8% of total sales, compared with $7.9 million, or 11.1% of total sales for the first quarter of 2021. The decrease was attributable to the decreased salaries.

Loss from operations was $3.3 million for the first quarter of 2022,compared to $1.0 million for the first quarter of 2021.

Net loss attributable to the Company for the first quarter of 2022 was $5.1 million compared with $1.2 million for first quarter of 2021. Basic and diluted loss  per share were $0.34 for the first quarter of 2022 compared with $0.08 for the first quarter of 2021.

Balance Sheet

As of March 31, 2022, Ever-Glory had approximately $41.7 million of cash and cash equivalents, compared with approximately $56.6 million as of December 31, 2021. Ever-Glory had working capital of approximately $42.3 million as of March 31, 2022, and outstanding bank loans of approximately $69.3 million as of March 31, 2022.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on May 13, 2022(8:00 p.m. Beijing Time on May 13, 2022). Listeners can access the conference call by dialing +1-888-394-8218 or + 1-323-701-0225 and using the access code 1720370. 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 May 13 through 11:59 p.m. Eastern Time on May 20 by calling +1-844-512-2921 or +1-412-317-6671 with pin number 1720370.

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”, “idole” and Jizhu.  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

Huilin Hua

Tel: +86-25-52096859

E-Mail: huahuilin@ever-glory.com.cn 

 

  

 


 EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

 

 

 

 

March 31,
2022

 

 

December 31,
2021

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

41,717

 

 

$

56,573

 

Restricted cash

 

 

42,525

 

 

 

40,768

 

Trading securities

 

 

2,965

 

 

 

3,251

 

Accounts receivable, net

 

 

55,025

 

 

 

69,859

 

Inventories

 

 

65,013

 

 

 

63,841

 

Advances on inventory purchases

 

 

5,065

 

 

 

8,179

 

Value added tax receivable

 

 

1,296

 

 

 

1,693

 

Other receivables and prepaid expenses

 

 

6,732

 

 

 

6,345

 

Amounts due from related parties

 

 

1,308

 

 

 

220

 

Total Current Assets

 

 

221,646

 

 

 

250,729

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

Equity security investment

 

 

5,229

 

 

 

5,682

 

Intangible assets, net

 

 

4,770

 

 

 

4,794

 

Property and equipment, net

 

 

36,838

 

 

 

36,340

 

Operating lease right-of-use assets

 

 

52,751

 

 

 

50,077

 

Deferred tax assets

 

 

202

 

 

 

899

 

Other non-current assets

 

 

1,575

 

 

 

784

 

Total Non-Current Assets

 

 

101,365

 

 

 

98,576

 

TOTAL ASSETS

 

$

323,011

 

 

$

349,305

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Bank loans

 

$

69,300

 

 

$

68,992

 

Accounts payable

 

 

50,533

 

 

 

67,930

 

Accounts payable and other payables – related parties

 

 

1,474

 

 

 

1,332

 

Other payables and accrued liabilities

 

 

13,288

 

 

 

18,531

 

Value added and other taxes payable

 

 

-

 

 

 

999

 

Income tax payable

 

 

500

 

 

 

334

 

Current operating lease liabilities

 

 

44,287

 

 

 

41,633

 

Total Current Liabilities

 

 

179,382

 

 

 

199,751

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

-

 

 

 

-

 

Non-current operating lease liabilities

 

 

8,628

 

 

 

8,596

 

TOTAL LIABILITIES

 

 

188,010

 

 

 

208,347

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Common stock ($0.001 par value, authorized 50,000,000 shares, 14,814,354 and 14,812,312 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively)

 

 

15

 

 

 

15

 

Additional paid-in capital

 

 

3,665

 

 

 

3,660

 

Retained earnings

 

 

103,121

 

 

 

108,210

 

Statutory reserve

 

 

21,245

 

 

 

21,245

 

Treasury stock (at cost,162,080 and 147,334 shares at March 31,2022 and December 31, 2021, respectively)

 

 

(400

)

 

 

(363

)

Accumulated other comprehensive income

 

 

7,355

 

 

 

8,191

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

135,001

 

 

 

140,958

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

323,011

 

 

$

349,305

 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES CONDENSED

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

 

 

 

Three Months Ended

 

 

 

March 31,
2022

 

 

March 31,
2021

 

 

 

 

 

 

 

 

NET SALES

 

$

64,773

 

 

$

70,814

 

 

 

 

 

 

 

 

 

 

COST OF SALES

 

 

47,401

 

 

 

48,379

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

17,372

 

 

 

22,435

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

Selling expenses

 

 

13,686

 

 

 

15,548

 

General and administrative expenses

 

 

6,994

 

 

 

7,851

 

Total operating expenses

 

 

20,680

 

 

 

23,399

 

 

 

 

 

 

 

 

   

 

LOSS FROM OPERATIONS

 

 

(3,308

)

 

 

(964

)

 

 

 

 

 

 

 

 

 

OTHER (EXPENSE) INCOME

 

 

 

 

 

 

 

 

Interest income

 

 

186

 

 

 

224

 

Interest expense

 

 

(613

)

 

 

(492

)

Government subsidy

 

 

3

 

 

 

259

 

(Loss) gain from changes in fair values of investments

 

 

(762

)

 

 

339

 

Other income

 

 

517

 

 

 

193

 

Total Other (Expense) Income, Net

 

 

(669

)

 

 

523

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAX EXPENSE

 

 

(3,977

)

 

 

(441

)

 

 

 

 

 

 

 

 

 

INCOME TAX EXPENSE

 

 

(1,112

)

 

 

(729

)

 

 

 

 

 

 

 

 

 

NET LOSS

 

$

(5,089

)

 

$

(1,170

)

Foreign currency translation loss

 

 

(836

)

 

 

(1,352

)

 

 

 

 

 

 

 

 

 

COMPREHENSIVE LOSS

 

$

(5,925

)

 

$

(2,522

)

LOSS PER SHARE

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.34

)

 

$

(0.08

)

Weighted average number of shares outstanding Basic and diluted

 

 

14,813,787

 

 

 

14,810,001

 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

FOR THE THREE MONTHS ENDED March 31, 2022 AND 2021 (Unaudited)

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total
equity

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional

 

 

 

 

 

Retained Earnings

 

 

Accumulated
other

 

 

Amounts
due from

 

 

attributable to
stockholders

 

 

Non-

 

 

 

 

 

 

Shares

 

 

Amount

 

 

paid-in
capital

 

 

Treasury
Stock

 

 

Unrestricted

 

 

Statutory
reserve

 

 

Comprehensive
income

 

 

related
party

 

 

of the
Company

 

 

controlling
Interest

 

 

Total
equity

 

Balance at January 1, 2022

 

 

14,812,312

 

 

$

15

 

 

$

3,660

 

 

$

(363

)

 

$

108,210

 

 

$

21,245

 

 

$

8,191

 

 

$

-

 

 

$

140,958

 

 

$

-

 

 

$

140,958

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock issued for compensation

 

 

2,042

 

 

 

-

 

 

 

5

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5

 

 

 

 

 

 

 

5

 

Net  loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,089

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,089

)

 

 

-

 

 

 

(5,089

)

Repurchase  of 14,746 shares of common stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(37

)

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(37

)

 

 

-

 

 

 

(37

)

Foreign currency translation loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(836

)

 

 

-

 

 

 

(836

)

 

 

-

 

 

 

(836

)

Balance at March 31, 2022

 

 

14,814,354

 

 

$

15

 

 

$

3,665

 

 

$

(400

)

 

$

103,121

 

 

$

21,245

 

 

$

7,355

 

 

$

-

 

 

$

135,001

 

 

$

-

 

 

$

135,001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total
equity

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional

 

 

 

 

 

Retained Earnings

 

 

Accumulated
other

 

 

Amounts
due from

 

 

attributable to
stockholders

 

 

Non-

 

 

 

 

 

 

Shares

 

 

Amount

 

 

paid-in
capital

 

 

Treasury
Stock

 

 

Unrestricted

 

 

Statutory
reserve

 

 

Comprehensive
income

 

 

related
party

 

 

of the
Company

 

 

controlling
Interest

 

 

Total
equity

 

Balance at January 1, 2021

 

 

14,809,160

 

 

$

15

 

 

$

3,650

 

 

$

-

 

 

$

109,171

 

 

$

20,376

 

 

$

4,590

 

 

$

(3,353

)

 

$

134,449

 

 

$

-

 

 

$

134,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock issued for compensation

 

 

1,500

 

 

 

-

 

 

 

5

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5

 

 

 

 

 

 

 

5

 

Net income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,170

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,170

)

 

 

-

 

 

 

(1,170

)

Transfer to reserve

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

Payments received from related party under counter guarantee agreement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

379

 

 

 

379

 

 

 

-

 

 

 

379

 

Repurchase  of 147,334 shares of common stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Foreign currency translation gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,352

)

 

 

-

 

 

 

(1,352

)

 

 

-

 

 

 

(1,352

)

Balance at December 31, 2021

 

 

14,810,660

 

 

$

15

 

 

$

3,655

 

 

$

-

 

 

$

108,001

 

 

$

20,376

 

 

$

3,238

 

 

$

(2,974

)

 

$

132,311

 

 

$

-

 

 

$

132,311

 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

 

 

 

Three Months Ended

 

 

 

March 31,
2022

 

 

March 31,
2021

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net less

 

$

(5,089

)

 

 

(1,170

)

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2,147

 

 

 

1,377

 

Loss from sale of property and equipment

 

 

52

 

 

 

102

 

Loss on deconsolidation of a subsidiary

 

 

-

 

 

 

-

 

Provision of (recovering from) bad debt allowance

 

 

298

 

 

 

(196

)

Provision for obsolete inventories

 

 

3,759

 

 

 

3,583

 

Changes in fair value of trading securities

 

 

(283

)

 

 

(262

)

Changes in fair value of investment

 

 

479

 

 

 

28

 

Deferred income tax

 

 

701

 

 

 

17

 

Stock-based compensation

 

 

5

 

 

 

5

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Accounts receivable

 

 

14,815

 

 

 

6,509

 

Inventories

 

 

(4,680

)

 

 

6,805

 

Value added tax receivable

 

 

405

 

 

 

52

 

Other receivables and prepaid expenses

 

 

(278

)

 

 

(367

)

Advances on inventory purchases

 

 

3,150

 

 

 

2,544

 

Amounts due from related parties

 

 

(1,089

)

 

 

(71

)

Accounts payable

 

 

(16,838

)

 

 

(14,690

)

Accounts payable and other payables- related parties

 

 

226

 

 

 

(769

)

Other payables and accrued liabilities

 

 

(6,252

)

 

 

(3,221

)

Value added and other taxes payable

 

 

(1,067

)

 

 

(220

)

Income tax payable

 

 

165

 

 

 

(358

)

Net cash (used in) operating activities

 

 

(9,374

)

 

 

(302

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(2,507

)

 

 

(1,378

)

Net purchase (proceeds from) of trading securities

 

 

569

 

 

 

(983

)

Investment payment

 

 

(788

)

 

 

-

 

Net cash used in investing activities

 

 

(2,726

)

 

 

(2,361

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from bank loans

 

 

12,600

 

 

 

12,336

 

Repayment of bank loans

 

 

(12,600

)

 

 

(6,168

)

Repurchase of common stock

 

 

(37

)

 

 

-

 

Net collection of amounts due from related party (equity)

 

 

-

 

 

 

148

 

Net cash (used in) provided by financing activities

 

 

(37

)

 

 

6,316

 

 

 

 

 

 

 

 

 

 

EFFECT OF EXCHANGE RATE CHANGES ON CASH

 

 

(962

)

 

 

(1,660

)

 

 

 

 

 

 

 

 

 

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(13,099

)

 

 

1,993

 

 

 

 

 

 

 

 

 

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD

 

 

97,341

 

 

 

121,723

 

 

 

 

 

 

 

 

 

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

 

$

84,242

 

 

$

123,716

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

 

41,717

 

 

 

78,056

 

Restricted cash

 

 

42,525

 

 

 

45,660

 

 

 

$

84,242

 

 

$

123,716

 

 

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

Interest

 

$

613

 

 

$

492

 

Income taxes