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Ever-Glory Reports Second Quarter 2022 Financial Resultsnew

Add: 2022   Update: 2022/08/12

 Ever-Glory Reports Second Quarter 2022 Financial Results

NANJING, China, August 12, 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 second quarter ended June 30, 2022.

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 2022, our retail brands continue to attract new customers and retain existing customers by focusing on design, quality and value,” Mr. Kang continued. “We operated a nationwide network of 816 stores as of June 30, 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 will 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, Mr. Kang concluded.

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 confidence 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 2022 Financial Results 

Total sales for the second quarter of 2022 were $63.8 million,  an increase of 5.4% from $60.6 million in the second quarter of 2021. This increase was primarily attributable to a 60.5% ($16.0 million) increase in our wholesale business, offset by a 37.3% ($12.7 million) decrease in our retail business.

 

Sales for the Company’s branded fashion apparel retail division decreased by 37.3% to $21.4 million for the second quarter of 2022, compared to $34.1 million for the second quarter of 2021. This decrease was primarily due to outbreak of COVID-19. The outbreak in China resulted in the reduction of customer traffic and temporary closures of shopping malls as mandated by the provincial governments in various provinces of China, which had adversely affected our retail business with a decline in sales.

 

Sales for the Company’s wholesale division increased by 60.5% to $42.4 million for the second quarter of 2022, compared to $26.4 million for the second quarter of 2021. This increase was primarily attributable to an increase in sales in Mainland China, Hong Kong, the United Kingdom, Europe and the United States, partially offset by a decrease in sales in Japan.

Total gross profit for the second quarter of 2022 increased by 11.0% to $20.4 million, compared to $18.4 million for the second quarter of 2021. Total gross margin for the second quarter of 2022 increased to 32.0% from 30.4% for the second quarter of 2021.

Gross profit for the retail business decreased by 16.0% to $12.4 million for the second quarter of 2022, compared to $14.8 million for the second quarter of 2021. Gross margin for the second quarter of 2022 was 58.1% compared to 43.4% for the second quarter of 2021.

Gross profit for the wholesale business increased by 122.1% to $8.0 million for the second quarter of 2022, compared to $3.6 million for the second quarter of 2021. Gross margin for the second quarter of 2022 increased to 18.8% from 13.6% for the second quarter of 2021.

Selling expenses for the second quarter of 2022 decreased by 19.5% to $11.7 million, or 18.3% of total sales, compared to $14.5 million, or 24.0% of total sales for the second quarter of 2021. The decrease was attributable to the decreased average salaries and decreased business trips.

 

General and administrative expenses for the second quarter of 2022 decreased by 27.9% to $5.5 million, or 8.7% of total sales, compared to $7.7 million, or 12.7% of total sales for the second quarter of 2021. The decrease was attributable to the decreased publicity expense and the depreciation of RMB.

 

Income (loss) from Operations was $3.2 million for the second quarter of 2022, compared to  ($3.8 million)  for the second quarter of 2021.

Net income (loss) for the second quarter of 2022 was $2.4 million compared to ($1.8 million) for the second quarter of 2021. Basic and diluted loss per share were $0.16 for the second quarter of 2022 compared to ($0.12) for the second quarter of 2021.

Balance Sheet 

As of June 30, 2022, Ever-Glory had approximately $32.9 million of cash and cash equivalents, compared to approximately $56.6 million as of December 31, 2021. Ever-Glory had working capital of approximately $51.3 million as of June 30, 2022, and outstanding bank loans of approximately $65.6 million as of June 30, 2022.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on August 12, 2022(8:00 p.m. Beijing Time on August 12, 2022). Listeners can access the conference call by dialing +1-877-704-4453 or +1-201-389-0920 and using the access code 13732317. 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 August 12 through 11:59 p.m. Eastern Time on August 19 by calling +1-844-512-2921 or +1-412-317-6671 with pin number 13732317.

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)

 

 

 

June 30,
2022

 

 

December 31,
2021

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

32,880

 

 

$

56,573

 

Restricted cash

 

 

42,316

 

 

 

40,768

 

Trading securities

 

 

2,550

 

 

 

3,251

 

Accounts receivable, net

 

 

60,039

 

 

 

69,859

 

Inventories

 

 

66,003

 

 

 

63,841

 

Advances on inventory purchases

 

 

4,683

 

 

 

8,179

 

Value added tax receivable

 

 

2,072

 

 

 

1,693

 

Other receivables and prepaid expenses

 

 

6,118

 

 

 

6,345

 

Amounts due from related parties

 

 

1,387

 

 

 

220

 

Total Current Assets

 

 

218,048

 

 

 

250,729

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

Equity security investment

 

 

5,416

 

 

 

5,682

 

Intangible assets, net

 

 

4,494

 

 

 

4,794

 

Property and equipment, net

 

 

33,621

 

 

 

36,340

 

Operating lease right-of-use assets

 

 

40,131

 

 

 

50,077

 

Deferred tax assets

 

 

-

 

 

 

899

 

Other non-current assets

 

 

2,980

 

 

 

784

 

Total Non-Current Assets

 

 

86,642

 

 

 

98,576

 

TOTAL ASSETS

 

$

304,690

 

 

$

349,305

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Bank loans

 

$

65,560

 

 

$

68,992

 

Accounts payable

 

 

52,362

 

 

 

67,930

 

Accounts payable and other payables – related parties

 

 

1,752

 

 

 

1,332

 

Other payables and accrued liabilities

 

 

13,833

 

 

 

18,531

 

Value added and other taxes payable

 

 

425

 

 

 

999

 

Income tax payable

 

 

558

 

 

 

334

 

Current operating lease liabilities

 

 

32,229

 

 

 

41,633

 

Total Current Liabilities

 

 

166,719

 

 

 

199,751

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

243

 

 

 

-

 

Non-current operating lease liabilities

 

 

8,070

 

 

 

8,596

 

TOTAL LIABILITIES

 

 

175,032

 

 

 

208,347

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Common stock ($0.001 par value, authorized 50,000,000 shares, 14,814,354 and 14,652,274 issued and outstanding as of June 30, 2022, respectively, 14,812,312 and 14,664,978 issued and outstanding as of December 31, 2021, respectively)

 

 

15

 

 

 

15

 

Additional paid-in capital

 

 

3,665

 

 

 

3,660

 

Retained earnings

 

 

105,521

 

 

 

108,210

 

Statutory reserve

 

 

21,245

 

 

 

21,245

 

Treasury stock (at cost,162,080 and 147,334 shares at June 30, 2022 and December 31, 2021, respectively)

 

 

(400

)

 

 

(363

)

Accumulated other comprehensive (loss) income

 

 

(388

)

 

 

8,191

 

 

 

 

 

 

 

 

 

 

Total Equity

 

 

129,658

 

 

 

140,958

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

304,690

 

 

$

349,305

 

 

 

 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited)

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

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

NET SALES

 

$

63,812

 

 

$

60,555

 

 

$

128,585

 

 

$

131,369

 

COST OF SALES

 

 

43,403

 

 

 

42,163

 

 

 

90,804

 

 

 

90,541

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

20,409

 

 

 

18,392

 

 

 

37,781

 

 

 

40,828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

 

11,675

 

 

 

14,503

 

 

 

25,361

 

 

 

30,052

 

General and administrative expenses

 

 

5,521

 

 

 

7,662

 

 

 

12,515

 

 

 

15,513

 

Total Operating Expenses

 

 

17,196

 

 

 

22,165

 

 

 

37,876

 

 

 

45,565

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

 

3,213

 

 

 

(3,773

)

 

 

(95

)

 

 

(4,737

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSES)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

91

 

 

 

527

 

 

 

277

 

 

 

752

 

Interest expense

 

 

(321

)

 

 

(200

)

 

 

(934

)

 

 

(692

)

Government subsidy

 

 

202

 

 

 

243

 

 

 

205

 

 

 

502

 

Gain (loss) from changes in fair values of investments

 

 

90

 

 

 

2,041

 

 

 

(672

)

 

 

2,275

 

Other income

 

 

51

 

 

 

477

 

 

 

568

 

 

 

774

 

Total Other Income (Expenses), Net

 

 

113

 

 

 

3,088

 

 

 

(556

)

 

 

3,611

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAX EXPENSE

 

 

3,326

 

 

 

(685

)

 

 

(651

)

 

 

(1,126

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

(926

)

 

 

(1,086

)

 

 

(2,038

)

 

 

(1,815

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

2,400

 

 

$

(1,771

)

 

$

(2,689

)

 

$

(2,941

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation (loss) gain

 

 

(7,743

)

 

 

3,434

 

 

 

(8,579

)

 

 

2,083

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPREHENSIVE (LOSS) INCOME

 

$

(5,343

)

 

 

1,663

 

 

$

(11,268

)

 

$

(858

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS (LOSS) PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.16

 

 

$

(0.12

)

 

$

(0.18

)

 

$

(0.20

)

Weighted average number of shares outstanding basic and diluted

 

 

14,814,354

 

 

 

14,810,660

 

 

 

14,814,072

 

 

 

14,810,330

 

 

 

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

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

 

 

 

Common Stock

 

 

Additional

 

 

 

 

 

Retained Earnings

 

 

Accumulated
other

 

 

Amounts
due from

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

paid-in
capital

 

 

Treasury
stock

 

 

Unrestricted

 

 

Statutory
reserve

 

 

comprehensive
income (loss)

 

 

related
party

 

 


Total equity

 

 

Balance at January 1, 2022

 

 

14,812,312

 

 

$

15

 

 

$

3,660

 

 

$

(363

)

 

$

108,210

 

 

$

21,245

 

 

$

8,191

 

 

$

     -

 

 

$

140,958

 

 

Stock issued for compensation

 

 

2,042

 

 

 

-

 

 

 

5

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5

 

 

Net  loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,089

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,089

)

 

Repurchase  of 14,746 shares of common stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(37

)

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(37

)

 

Foreign currency translation loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(836

)

 

 

 

 

 

 

(836

)

 

Balance at March 31, 2022

 

 

14,814,354

 

 

$

15

 

 

$

3,665

 

 

$

(400

)

 

$

103,121

 

 

$

21,245

 

 

$

7,355

 

 

$

-

 

 

$

135,001

 

 

Net  income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,400

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,400

 

 

Foreign currency translation loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,743

)

 

 

 

 

 

 

(7,743

)

 

Balance at June 30, 2022

 

 

14,814,354

 

 

$

15

 

 

$

3,665

 

 

$

(400

)

 

$

105,521

 

 

$

21,245

 

 

$

(388

)

 

 

-

 

 

$

129,658

 

 

 

 

 

Common Stock

 

 

Additional

 

 

 

 

 

Retained Earnings

 

 

Accumulated
other

 

 

Amounts
due from

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

paid-in
capital

 

 

Treasury
Stock

 

 

Unrestricted

 

 

Statutory
reserve

 

 

Comprehensive
income

 

 

related
party

 

 


Total equity

 

 

Balance at January 1, 2021

 

 

14,809,160

 

 

$

15

 

 

$

3,650

 

 

$

-

 

 

$

109,171

 

 

$

20,376

 

 

$

4,590

 

 

$

(3,353

)

 

$

134,449

 

 

Stock issued for compensation

 

 

1,500

 

 

 

-

 

 

 

5

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5

 

 

Net  loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,170

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,170

)

 

Net cash received from related party under counter guarantee agreement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

379

 

 

 

379

 

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,352

)

 

 

 

 

 

 

(1,352

)

 

Balance at March 31, 2021

 

 

14,810,660

 

 

$

15

 

 

$

3,655

 

 

$

-

 

 

$

108,001

 

 

$

20,376

 

 

$

3,238

 

 

$

(2,974

)

 

$

132,311

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,771

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,771

)

 

Transfer to reserve

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

Net cash received from related party under counter guarantee agreement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-