Ever-Glory Reports Third Quarter 2020 Financial Results



NEW YORK, Nov. 13, 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 third quarter ended September 30, 2020.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "During the third 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 third 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 38 stores during 2020, we operated a nationwide network of 923 stores as of September 30, 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 third 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."

Third Quarter 2020 Financial Results 

Total sales for the third quarter of 2020 were $79.9 million, a decrease of 29.5% from $113.3 million in the third quarter of 2019. This decrease was primarily driven by a 44.9% decrease in our wholesale business, partially offset by a 10.3% increase in retail business.

Sales for the Company's branded fashion apparel retail division increased by 10.3% to $34.8 million for the third quarter of 2020, compared with $31.6 million for the third quarter of 2019. This increase was primarily due to an increase in the e-commerce sales. The Company had 923 retail stores as of September 30, 2020, compared with 1,157 retail stores as of September 30, 2019.

Sales for the Company's wholesale division decreased by 44.9% to $45.1 million for the third quarter of 2020, compared with $81.7 million for the third quarter of 2019. This decrease was primarily attributable to a decrease in sales in Mainland China, Hong Kong, Germany, Europe-Other, Japan, United States and United Kingdom.

Total gross profit for the third quarter of 2020 decreased by 2.8% to $23.7 million, compared with $24.4 million for the third quarter of 2019. Total gross margin increased to 29.6% from 21.5% for the third quarter of 2019.

Gross profit for the retail business increased by 2.7% to $14.5 million for the third quarter of 2020, compared with $14.1 million for the third quarter of 2019. Gross margin was 41.6%, compared to 44.7% for the third quarter of 2019.

Gross profit for the wholesale business decreased by 10.4% to $9.2 million for the third quarter of 2020, compared with $10.3 million for the third quarter of 2019. Gross margin increased to 20.4% from 12.6% for the third quarter of 2019.

Selling expenses for the third quarter of 2020 decreased by 27.6% to $13.0 million, or 16.3% of total sales, compared with $17.9 million, or 15.8% of total sales for the third quarter of 2019. The decrease was attributable to the lower travelling expenses.

General and administrative expenses for the third quarter of 2020 increased by 3.1% to $7.8 million, or 9.8% of total sales, compared with $7.6 million, or 6.7% of total sales for the third quarter of 2019. The increase was attributable to the foreign currency transaction gain.

Income (Loss) from operations for the third quarter of 2020 increased by 344.5% to $2.8 million compared with ($1.2 million) for the third quarter of 2019.

Net income (loss) attributable to the Company for the third quarter of 2020 was $2.2 million compared with ($1.1 million) for the third quarter of 2019. Basic and diluted earnings (loss) per share were $0.15 for the third quarter of 2020 compared with ($0.07) for the third quarter of 2019.

Balance Sheet

As of September 30, 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 $53.3 million as of September 30, 2020, and outstanding bank loans of approximately $48.4 million as of September 30, 2020.

Conference Call

The Company will hold a conference call at 7:00 a.m. Eastern Time on November 13, 2020 (8:00 p.m. Beijing Time on November 13, 2020). Listeners can access the conference call by dialing +1-866-548-4713 or + 1-323-794-2093 and using the access code 9522138. 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 10:00 a.m. Eastern Time on November 13 through 11:59 p.m. Eastern Time on November 20 by calling +1-844-512-2921 or +1-412-317-6671 with pin number 9522138.

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.

 

 

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 SEPTEMBER 30, 2020 AND DECEMBER 31, 2019 (UNAUDITED)







2020





2019



ASSETS



























CURRENT ASSETS













Cash and cash equivalents



$

69,950





$

48,551



Restricted cash





20,552







2,204



Trading securities





817







-



Accounts receivable, net





62,866







78,053



Inventories





46,443







67,355



Advances on inventory purchases





7,393







9,681



Value added tax receivable





2,106







2,495



Other receivables and prepaid expenses





5,229







5,293



Amounts due from related parties





1,086







123



Total Current Assets





216,442







213,755





















NONCURRENT ASSETS

















Equity security investment





2,936







-



Intangible assets, net





4,628







4,729



Property and equipment, net





28,203







28,812



Operating lease right-of-use assets





37,705







53,379



Deferred tax assets





1,099







996



Total Non-Current Assets





74,571







87,916



TOTAL ASSETS



$

291,013





$

301,671





















LIABILITIES AND STOCKHOLDERS' EQUITY



































CURRENT LIABILITIES

















Bank loans



$

48,444





$

29,931



Accounts payable





65,155







72,418



Accounts payable and other payables – related parties





3,878







4,811



Other payables and accrued liabilities





14,159







19,137



Value added and other taxes payable





1,134







1,657



Income tax payable





1,104







1,142



Current operating lease liabilities





29,296







44,888



Total Current Liabilities





163,170







173,984





















NONCURRENT LIABILITIES

















Non-current operating lease liabilities





8,491







8,537



TOTAL LIABILITIES





171,661







182,521





















COMMITMENTS AND CONTINGENCIES (Note 9)



































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, 14,809,160 and

    14,801,770 shares issued and outstanding as of September 30, 2020 and

    December 31, 2019, respectively)





15







15



Additional paid-in capital





3,650







3,640



Retained earnings





102,049







106,328



Statutory reserve





19,939







19,939



Accumulated other comprehensive (loss)





(1,308)







(4,330)



Amounts due from related party





(3,430)







(4,932)



Total equity attributable to stockholders of the Company





120,915







120,660



Noncontrolling interest





(1,563)







(1,510)



Total Equity





119,352







119,150



TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY



$

291,013





$

301,671



 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES CONDENSED

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

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

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)







Three months ended





Nine months ended







September 30,





September 30,







2020





2019





2020





2019



NET SALES



$

79,908





$

113,326





$

188,350





$

278,598



COST OF SALES





56,235







88,967







134,193







195,895





































GROSS PROFIT





23,673







24,359







54,157







82,703





































OPERATING EXPENSES

































Selling expenses





12,996







17,944







39,101







58,651



General and administrative expenses





7,818







7,584







19,574







22,450



Total Operating Expenses





20,814







25,528







58,675







81,101





































INCOME (LOSS) FROM OPERATIONS





2,859







(1,169)







(4,518)







1,602





































OTHER INCOME (EXPENSES)

































Interest income





313







215







930







699



Interest expense





(700)







(265)







(1,607)







(1,036)



Other income, net





574







502







2,236







1,616



Total Other Income, Net





187







452







1,559







1,279





































INCOME (LOSS) BEFORE INCOME TAX

EXPENSE





3,046







(717)







(2,959)







2,881



Income tax expense





(822)







(387)







(1,315)







(2,667)





































NET INCOME (LOSS)





2,224







(1,104)







(4,274)







214





































Net (loss) income attributable to the non-controlling

interest





(8)







28







(4)







46



NET INCOME (LOSS) ATTRIBUTABLE TO THE

COMPANY





2,216







(1,076)







(4,278)







260





































NET INCOME (LOSS)



$

2,224





$

(1,104)





$

(4,274)





$

214





































Foreign currency translation gain (loss)





4,664







(3,729)







2,964







(2,244)



COMPREHENSIVE INCOME (LOSS)





6,888







(4,833)







(1,310)







(2,030)





































Comprehensive (loss) income attributable to the non-

controlling interest





(56)







15







(54)







67



COMPREHENSIVE INCOME

(LOSS) ATTRIBUTABLE TO THE COMPANY



$

6,832





$

(4,818)





$

(1,364)





$

(1,963)





































EARNINGS PER SHARE ATTRIBUTABLE TO

THE COMPANY'S STOCKHOLDERS

































Basic and diluted



$

0.15





$

(0.07)





$

(0.29)





$

0.02



Weighted average number of shares outstanding

Basic and diluted





14,808,737







14,801,770







14,805,987







14,801,770



 

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 NINE MONTHS ENDED SEPTEMBER 30, 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 issued

for compensation





3,062







-







5







-







-







-







-







5















5



Net loss





-







-







-







(2,701)







-







-







-







(2,701)







3







(2,698)



Net cash received

from related

party under

counter

guarantee

agreement





-







-







-







-







-







-







785







785







-







785



Foreign

currency

translation

gain (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



Net loss





























(3,794)































(3,794)







(6)







(3,800)



Net cash

received

from related

party under

counter

guarantee

agreement





















































151







151















151



Foreign

currency

translation

loss













































(261)















(261)







(2)







(263)



Balance at

June 30,

2020





14,804,832





$

15





$

3,645





$

99,833





$

19,939





$

(6,031)





$

(3,996)





$

113,405







(1,512)





$

111,893



Stock issued

for

compensation





4,328







-







5







-







-







-







-







5















5



Net income





























2,216































2,216







8







2,224



Net cash

received

from related

party under

counter

guarantee

agreement





















































566







566







-







566



Foreign

currency

translation

gain













































4,723















4,723







(59)







4,664



Balance at

September 

30, 2020





14,809,160





$

15





$

3,650





$

102,049





$

19,939





$

(1,308)





$

(3,430)





$

120,915







(1,563)





$

119,352



 

 











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







19,083







394







(9,253)







119,267







(1,451)







117,816



Net income

(loss)





























1,856































1,856







(83)







1,773



Net cash

received

from related

party under

counter

guarantee

agreement





















































1,390







1,390















1,390



Foreign

currency

translation

loss













































(2,487)















(2,487)







34







(2,453)



Balance at

June 30,

2019





14,800,140





$

15





$

3,635





$

107,249





$

19,083





$

(2,093)





$

(7,863)





$

120,026







(1,500)





$

118,526



Stock issued

for compensation





1,630







0.002







5







































5















5





















































































Net income

(loss)





























(1,076)































(1,076)







(28)







(1,104)



Net cash

advanced to

related party

under

counter

guarantee

agreement





















































1,215







1,215















1,215



Foreign

currency

translation

loss













































(3,729)















(3,729)







43







(3,686)



Balance at

September 30,

2019





14,801,770





$

15





$

3,640





$

106,173





$

19,083





$

(5,822)





$

(6,648)





$

116,441







(1,485)





$

114,956



 

 

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 NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)







2020





2019



CASH FLOWS FROM OPERATING ACTIVITIES













Net (loss) income



$

(4,274)





$

214



Adjustments to reconcile net (loss) income to cash provided by operating

activities:

















Depreciation and amortization





4,114







6,824



Loss from sale of property and equipment





283







16



Provision of bad debt allowance





683







820



Provision for obsolete inventories





5,786







3,846



Investment loss from the trading securities





13







-



Deferred income tax





(165)







(2,388)



Stock-based compensation





10







12



Changes in operating assets and liabilities

















Accounts receivable





15,571







312



Inventories





16,135







(4,979)



Value added tax receivable





(577)







(281)



Other receivables and prepaid expenses





50







3,738



Advances on inventory purchases





2,461







(3,214)



Amounts due from related parties





(848)







16



Accounts payable





(7,842)







6,253



Accounts payable and other payables- related parties





(1,112)







(692)



Other payables and accrued liabilities





(6,093)







(10,594)



Value added and other taxes payable





467







(4,120)



Income tax payable





(64)







746



Net cash provided by (used in) operating activities





24,598







(3,471)





















CASH FLOWS FROM INVESTING ACTIVITIES

















Purchases of property and equipment





(2,769)







(6,555)



Purchases of trading securities





(825)







-



Investment in a partnership





(2,936)







-



Net cash used in investing activities





(6,530)







(6,555)





















CASH FLOWS FROM FINANCING ACTIVITIES

















Proceeds from bank loans





66,599







42,570



Repayment of bank loans





(49,278)







(35,620)



Net collection (advance) of amounts due from related party (equity)





1,618







3,937



Net cash provided by financing activities





18,939







10,887





















EFFECT OF EXCHANGE RATE CHANGES ON CASH





2,740







(650)





















NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED

CASH





39,747







211





















CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING

OF PERIOD





50,755







47,012





















CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF

PERIOD



$

90,502





$

47,223





















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

consolidated balance sheets:



































Cash and Cash Equivalents





69,950







45,837



Restricted cash





20,552







1,386







$

90,502





$

47,223





















SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:



































Cash paid during the period for:

















Interest



$

1,607





$

1,036



Income taxes



$

1,455





$

4,196



 

 

Cision View original content:http://www.prnewswire.com/news-releases/ever-glory-reports-third-quarter-2020-financial-results-301172609.html

SOURCE Ever-Glory International Group, Inc.

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