Ever-Glory Reports Fourth Quarter 2019 Financial Results

NANJING, China, March 30, 2020 /PRNewswire/ -- Ever-Glory International Group, Inc. (the "Company" or "Ever-Glory") EVK, a retailer of branded fashion apparel and a leading global apparel supply chain solution provider, reported its financial results today for the fourth quarter ended December 31, 2019.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "During the fourth 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 full year 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 117 stores during 2019, we operated a nationwide network of 1,101 stores as of December 31, 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 fourth 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."

Full Year 2019 Financial Results 

Total sales for the full year of 2019 were $383.1 million, a 14.6% decrease from $448.5 million in the full year of 2018. This decrease was primarily due to a 10.7% decrease in wholesale sales and an 18.2% decrease in retail sales.

Wholesale sales from the Company's wholesale business decreased by 10.7% to $195.2 million for the full year of 2019, compared with $218.6 million for the full year of 2018. This decrease was primarily attributable to decreased sales in Mainland China, United Kingdom, Hong Kong China, Germany and Europe-Other partially offset by increased sales in Japan and United States.

Retail sales from the Company's branded fashion apparel retail division decreased by 18.2% to $187.9 million for the full year of 2019, compared with $229.9 million for the full year of 2018. This decrease was primarily due to a decrease in same store sales.

Total gross profit for the full year of 2019 decreased by 19.4% to $118.8 million, compared with $147.4 million for the full year of 2018. Total gross margin for the full year of 2019 decreased to 31.0% from 32.9% for the full year of 2018. 

Gross profit for wholesale business decreased by 4.6% to $39.9 million for the full year of 2019, compared with $41.8 million for the full year of 2018. Gross margin for the full year of 2019 increased to 20.4% compared with 19.1% for the full year of 2018.

Gross profit for retail business decreased by 25.2% to $78.9 million for the full year of 2019, compared with $105.6 million for the full year of 2018. Gross margin for the full year of 2019 decreased to 42.0% from 45.9% for the full year of 2018.

Selling expenses for the full year of 2019 decreased by 12.3% to $80.2 million, or 20.9% of total sales, compared with $91.4 million, or 20.4% of total sales for the full year of 2018. The decrease was attributable to lower retail sales.

General and administrative expenses for the full year of 2019 decreased by 11.8% to $35.1 million, or 9.2% of total sales, compared with $39.8 million, or 8.9% of total sales for the full year of 2018. The decrease in absolute amount was mainly attributable to the decline in number of stores.

Income from operations for the full year of 2019 decreased by 76.5% to $3.5 million compared with $15.0 million for the full year of 2018.

Net income attributable to the Company for the full year of 2019 decreased by 89.4% to $1.3 million compared with $12.0 million for the full year of 2018. Basic and diluted earnings per share were $0.09 and $0.81 for the full year of 2019 and 2018, respectively.

Balance Sheet

As of December 31, 2019, Ever-Glory had approximately $48.6 million of cash and cash equivalents, compared with approximately $47.0 million as of December 31, 2018. Ever-Glory had working capital of approximately $39.8 million as of December 31, 2019, and outstanding bank loans of approximately $29.9 million as of December 31, 2019.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on March 30, 2020 (8:00 p.m. Beijing Time on March 30, 2020). Listeners can access the conference call by dialing +1-800-289-0438 or + 1-323-794-2423 and using the access code 1073501. 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 March 30 through 11:59 p.m. Eastern Time on April 6, by dialing +1-844-512-2921 or +1-412-317-6671 and using the access code 1073501.

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

CONSOLIDATED BALANCE SHEETS

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

AS OF DECEMBER 31, 2019 AND 2018





2019



2018



ASSETS









CURRENT ASSETS









Cash and cash equivalents

$

48,551



$

47,012



Accounts receivable, net



78,053





86,527



Inventories



67,355





65,929



Value added tax receivable



2,495





2,580



Other receivables and prepaid expenses



7,497





10,204



Advances on inventory purchases



9,681





6,420



Amounts due from related parties



123





192



Total Current Assets



213,755





218,864

















NONCURRENT ASSETS













Intangible assets, net



4,729





4,962



Property and equipment, net



28,812





28,445



Operating lease right-of-use assets



53,379





-



Deferred tax assets



996





-



Total Non-Current Assets



87,916





33,407



TOTAL ASSETS

$

301,671



$

252,271

















LIABILITIES AND STOCKHOLDERS' EQUITY



























CURRENT LIABILITIES













Bank loans

$

29,931



$

29,497



Accounts payable



72,418





78,412



Accounts payable and other payables - related parties



4,811





4,756



Other payables and accrued liabilities



19,137





21,958



Value added and other taxes payable



1,657





2,569



Income tax payable



1,142





1,569



Current operating lease liabilities



44,888





-



Total Current Liabilities



173,984





138,761

















NONCURRENT LIABILITIES













Deferred tax liabilities



-





354



Non-current operating lease liabilities



8,537





-



TOTAL LIABILITIES



182,521





139,115

















NOTE 13 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, 14,801,770 and

     14,798,198 shares issued and outstanding as of December 31, 2019 and

     December 31, 2018, respectively)



15





15



Additional paid-in capital



3,640





3,627



Retained earnings



106,328





105,914



Statutory reserve



19,939





19,083



Accumulated other comprehensive loss



(4,330)





(3,578)



Amounts due from related party



(4,932)





(10,354)



Total equity attributable to stockholders of the Company



120,660





114,707



Noncontrolling interest



(1,510)





(1,551)



Total Equity



119,150





113,156



TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

301,671



$

252,271



 

 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

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

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018





2019



2018













SALES

$

383,101



$

448,508

















COST OF SALES



264,330





301,153

















GROSS PROFIT



118,771





147,355

















OPERATING EXPENSES













Selling expenses



80,180





91,439



General and administrative expenses



35,123





39,811



Marketing related intangible asset impairment



-





1,086



Total operating expenses



115,303





132,336

















INCOME FROM OPERATIONS



3,468





15,019

















OTHER INCOME (EXPENSE)













Interest income



1,003





1,375



Interest expense



(1,222)





(1,989)



Other income



2,532





1,977



Total other income



2,313





1,363

















INCOME BEFORE INCOME TAX EXPENSE



5,781





16,382

















INCOME TAX EXPENSE



(4,562)





(4,942)

















NET INCOME



1,219





11,440

















Net loss attributable to the non-controlling interest



51





568



NET INCOME ATTRIBUTABLE TO THE COMPANY

$

1,270



$

12,008

















NET INCOME

$

1,219



$

11,440



Foreign currency translation loss



(660)





(6,084)



COMPREHENSIVE INCOME

$

559



$

5,356

















Comprehensive loss attributable to the noncontrolling interest



41





489

















COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY

$

610



$

5,845



EARNINGS PER SHARE ATTRIBUTABLE TO THE COMPANY'S

STOCKHOLDERS:













Basic and diluted

$

0.09



$

0.81



Weighted average number of shares outstanding Basic and diluted



14,801,770





14,798,198



 

 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF EQUITY



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



FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018













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,

   2018



14,795,992



$

15



$

3,620



$

95,195



$

17,794



$

2,585



$

(15,449)



$

103,760



(1,062)



$

102,698































































Stock issued 

   for 

   compensation



2,206





0.002





7





-





-





-





-





7









7



Net income

    (loss)



-





-





-





12,008





-





-





-





12,008



(568)





11,440



Transfer to

    reserve



-





-





-





(1,289)





1,289





-





-





-









-



Net cash paid to

    related party

    under counter

    guarantee

    agreement



-





-





-





-





-





-





5,095





5,095



-





5,095



Foreign

    currency

    translation

    loss

































(6,163)











(6,163)



79





(6,084)



Balance at

    December

    31, 2018



14,798,198



$

15



$

3,627



$

105,914



$

19,083



$

(3,578)



$

(10,354)



$

114,707



(1,551)



$

113,156































































Stock issued for

    compensation



3,572





-





13





-





-





-





-





13









13



Net income

    (loss)



-





-





-





1,270





-





-





-





1,270



(51)





1,219



Transfer to

    reserve



-





-





-





(856)





856





-





-





-









-



Net cash paid to

    related party

    under counter

    guarantee

    agreement

    (Note 12)



-





-





-





-





-





-





5,422





5,422



-





5,422



Foreign

    currency

    translation

    gain

































(752)











(752)



92





(660)



Balance at

    December

    31, 2019



14,801,770



$

15



$

3,640



$

106,328



$

19,939



$

(4,330)



$

(4,932)



$

120,660



(1,510)



$

119,150



 

  

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CASH FLOWS



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



FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018









2019



2018



CASH FLOWS FROM OPERATING ACTIVITIES









Net income

$

1,219



$

11,440



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













Intangible asset impairment loss



-





1,086



Depreciation and amortization



8,239





6,664



Loss from sale of property and equipment



9





108



Provision of bad debt allowance



1,062





660



Provision for obsolete inventories



2,804





3,324



Deferred income tax



(1,472)





(1,370)



Stock-based compensation



12





7



Changes in operating assets and liabilities













Accounts receivable



6,652





(9,893)



Inventories



(5,145)





(16,462)



Value added tax receivable



1,077





1,016



Other receivables and prepaid expenses



2,394





(5,659)



Advances on inventory purchases



(3,395)





(3,698)



Amounts due from related parties



67





(2,761)



Accounts payable



(2,305)





8,485



Accounts payable and other payables- related parties



176





6,275



Other payables and accrued liabilities



(4,052)





5,604



Value added and other taxes payable



(2,948)





(2,210)



Income tax payable



(409)





(54)



Net cash provided by operating activities



3,985





2,562

















CASH FLOWS FROM INVESTING ACTIVITIES













Purchase of property and equipment



(8,675)





(12,182)



Net cash used in investing activities



(8,675)





(12,182)

















CASH FLOWS FROM FINANCING ACTIVITIES













Proceeds from bank loans



59,528





64,006



Repayment of bank loans



(58,665)





(70,513)



Repayment of loans from related party



13,163





6,657



Advances to related party



(8,381)





(8,428)



Interest income received from related party



472





2,997



Net cash provided by (used in) financing activities



6,117





(5,281)

















EFFECT OF EXCHANGE RATE CHANGES ON CASH



2,316





(963)

















NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED

CASH



3,743





(15,864)

















CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING

OF PERIOD



47,012





62,876

















CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF

PERIOD

$

50,755



$

47,012

















Reconciliation of cash, cash equivalents and restricted cash reported within their

consolidated balance sheets:



























Cash and Cash Equivalents



48,551





47,012



Restricted cash (booked in other receivables and prepaid expenses)



2,204





-





$

50,755



$

47,012

















SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:



























Cash paid during the period for:













Interest

$

1,222



$

1,755



Income taxes

$

6,327



$

6,350



 

 

 

Cision View original content:http://www.prnewswire.com/news-releases/ever-glory-reports-fourth-quarter-2019-financial-results-301031521.html

SOURCE Ever-Glory International Group, Inc.

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