Ever-Glory Reports First Quarter 2019 Financial Results
NANJING, China, May 14, 2019 /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, 2019.
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. Notably, we achieved year-over-year improvement in gross profit of 13.0% for our wholesale business."
"During the first quarter of 2019, we remained our focus on driving retail business through store network optimization strategy, as well as inventory management strategy," Mr. Kang continued. "Following the remodeling or relocation of 7 stores during 2019, we operated a nationwide network of 1,315 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 the light of weak micro environment and enhancing our account receivables. Going forward, we'll implement a stricter client evaluation system and remain diligent in 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, coupled with our ability to increase operating leverage, resulted in expanded wholesale operating income during this quarter. 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 2019 Financial Results
Total sales for the first quarter of 2019 were $88.0 million, a decrease of 5.2% from $92.8 million in the first quarter of 2018. This decrease was primarily driven by an 11.4% decrease in our retail business, partially offset by an 11.3% increase in wholesale business.
Sales for the Company's branded fashion apparel retail division decreased by 11.4% to $59.9 million for the first quarter of 2019, compared with $67.5 million for the first quarter of 2018. This decrease was primarily due to a decrease in same-store sales. The Company had 1,315 retail stores as of March 31, 2019, compared with 1,409 retail stores as of March 31, 2018.
Sales for the Company's wholesale division increased by 11.3% to $28.1 million for the first quarter of 2019, compared with $25.3 million for the first quarter of 2018. This increase was primarily attributable to increased sales in Mainland China, other European markets and Japan partially offset for decreased sales in Hong Kong, the United States, the United Kingdom and Germany.
Total gross profit for the first quarter of 2019 decreased by 6.3% to $29.4 million, compared with $31.3 million for the first quarter of 2018. Total gross margin decreased to 33.4% from 33.8% for the first quarter of 2018.
Gross profit for the retail business decreased by 10.7% to $22.8 million for the first quarter of 2019, compared with $25.5 million for the first quarter of 2018. Gross margin was 38.1%, compared to 37.8% for the first quarter of 2018.
Gross profit for the wholesale business increased by 13.0% to $6.6 million for the first quarter of 2019, compared with $5.8 million for the first quarter of 2018. Gross margin increased to 23.3% from 23.0% for the first quarter of 2018.
Selling expenses for the first quarter of 2019 decreased by 5.5% to $21.0 million, or 23.9% of total sales, compared with $22.2 million, or 24.0% of total sales for the first quarter of 2018. The decrease was attributable to the decreased sales.
General and administrative expenses for the first quarter of 2019 decreased by 1.9% to $7.5 million, or 8.6% of total sales, compared with $7.7 million, or 8.3% of total sales for the first quarter of 2018. The decrease was mainly attributable to the decreased office expenses.
Income from operations for the first quarter of 2019 decreased by 43.2% to $0.8 million compared with $1.4 million for the first quarter of 2018.
Net income(loss) attributable to the Company for the first quarter of 2019 was ($0.5) million compared with $0.8 million for the first quarter of 2018. Basic and diluted earnings(loss) per share were ($0.04) for the first quarter of 2019 compared with basic and diluted earnings per share of $0.06 for the first quarter of 2018.
Balance Sheet
As of March 31, 2019, Ever-Glory had approximately $57.9 million of cash and cash equivalents, compared with approximately $47.0 million as of December 31, 2018. Ever-Glory had working capital of approximately $28.5 million as of March 31, 2019, and outstanding bank loans of approximately $28.8 million as of March 31, 2019.
Conference Call
The Company will hold a conference call at 8:00 a.m. Eastern Time on May 14, 2019 (8:00 p.m. Beijing Time on May 14, 2019). Listeners can access the conference call by dialing +1-800-289-0438 or + 1-323-794-2423 and using the access code 7887070. 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 14 through 11:59 p.m. Eastern Time on May 21, by dialing +1-844-512-2921 or +1-412-317-6671 and using the access code 7887070.
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: [email protected]
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, 2019 AND DECEMBER 31, 2018 (UNAUDITED) |
||||||||
2019 |
2018 |
|||||||
ASSETS |
||||||||
CURRENT ASSETS |
||||||||
Cash and cash equivalents |
$ |
57,876 |
$ |
47,012 |
||||
Accounts receivable, net |
57,595 |
86,527 |
||||||
Inventories |
55,035 |
65,929 |
||||||
Advances on inventory purchases |
6,087 |
6,420 |
||||||
Value added tax receivable |
1,229 |
2,580 |
||||||
Other receivables and prepaid expenses |
6,365 |
10,204 |
||||||
Amounts due from related parties |
75 |
192 |
||||||
Total Current Assets |
184,262 |
218,864 |
||||||
NONCURRENT ASSETS |
||||||||
Intangible assets, net |
5,046 |
4,962 |
||||||
Property and equipment, net |
29,135 |
28,445 |
||||||
Operating lease right-of-use assets |
64,549 |
- |
||||||
Total Non-Current Assets |
98,730 |
33,407 |
||||||
TOTAL ASSETS |
$ |
282,992 |
$ |
252,271 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
CURRENT LIABILITIES |
||||||||
Bank loans |
$ |
28,839 |
$ |
29,497 |
||||
Accounts payable |
51,470 |
78,412 |
||||||
Accounts payable and other payables – related parties |
4,040 |
4,756 |
||||||
Other payables and accrued liabilities |
13,769 |
21,958 |
||||||
Value added and other taxes payable |
1,305 |
2,569 |
||||||
Income tax payable |
862 |
1,569 |
||||||
Current operating lease liabilities |
55,434 |
- |
||||||
Total Current Liabilities |
155,719 |
138,761 |
||||||
NONCURRENT LIABILITIES |
||||||||
Deferred tax liabilities |
330 |
354 |
||||||
Non-current operating lease liabilities |
9,127 |
- |
||||||
TOTAL LIABILITIES |
165,176 |
139,115 |
||||||
COMMITMENTS AND CONTINGENCIES |
||||||||
STOCKHOLDERS' EQUITY |
||||||||
Stockholders' equity: |
||||||||
Preferred stock ($0.001 par value, authorized 5,000,000 shares, no shares issued |
- |
- |
||||||
Common stock ($0.001 par value, authorized 50,000,000 shares, 14,800,140 and |
15 |
15 |
||||||
Additional paid-in capital |
3,635 |
3,627 |
||||||
Retained earnings |
105,393 |
105,914 |
||||||
Statutory reserve |
19,083 |
19,083 |
||||||
Accumulated other comprehensive income |
394 |
(3,578) |
||||||
Amounts due from related party |
(9,253) |
(10,354) |
||||||
Total equity attributable to stockholders of the Company |
119,267 |
114,707 |
||||||
Noncontrolling interest |
(1,451) |
(1,551) |
||||||
Total Equity |
117,816 |
113,156 |
||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
282,992 |
$ |
252,271 |
||||
EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES CONDENSED |
||||||||
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME |
||||||||
(In thousands of U.S. Dollars, except share and per share data or otherwise stated) |
||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018 (UNAUDITED) |
||||||||
2019 |
2018 |
|||||||
SALES |
$ |
87,956 |
$ |
92,785 |
||||
COST OF SALES |
58,598 |
61,440 |
||||||
GROSS PROFIT |
29,358 |
31,345 |
||||||
OPERATING EXPENSES |
||||||||
Selling expenses |
21,008 |
22,225 |
||||||
General and administrative expenses |
7,529 |
7,674 |
||||||
Total operating expenses |
28,537 |
29,899 |
||||||
INCOME FROM OPERATIONS |
821 |
1,446 |
||||||
OTHER INCOME (EXPENSE) |
||||||||
Interest income |
207 |
326 |
||||||
Interest expense |
(363) |
(564) |
||||||
Other income (expenses) |
(295) |
136 |
||||||
Total other expenses |
(451) |
(102) |
||||||
INCOME BEFORE INCOME TAX EXPENSE |
370 |
1,344 |
||||||
INCOME TAX EXPENSE |
(825) |
(757) |
||||||
NET INCOME(LOSS) |
(455) |
587 |
||||||
Net income(loss) attributable to the non-controlling interest |
(66) |
228 |
||||||
NET INCOME(LOSS) ATTRIBUTABLE TO THE COMPANY |
$ |
(521) |
$ |
815 |
||||
NET INCOME(LOSS) |
$ |
(455) |
$ |
587 |
||||
Foreign currency translation gain |
3,972 |
4,023 |
||||||
COMPREHENSIVE INCOME |
$ |
3,517 |
$ |
4,610 |
||||
Comprehensive loss attributable to the noncontrolling interest |
100 |
270 |
||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY |
$ |
3,617 |
$ |
4,880 |
||||
EARNINGS(LOSS) PER SHARE: |
||||||||
Basic and diluted |
$ |
(0.04) |
$ |
0.06 |
||||
Weighted average number of shares outstanding Basic and diluted |
14,800,140 |
14,795,992 |
||||||
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, 2019 AND 2018 (Unaudited) |
||||||||||||||||||||||||||||||||||||||||
Additional |
Retained Earnings |
Accumulated |
Amounts |
Total |
Non- |
|||||||||||||||||||||||||||||||||||
Common Stock |
paid-in |
Statutory |
Comprehensive |
related |
of the |
controlling |
Total |
|||||||||||||||||||||||||||||||||
Shares |
Amount |
capital |
Unrestricted |
reserve |
income |
party |
Company |
Interest |
equity |
|||||||||||||||||||||||||||||||
Balance at |
14,798,198 |
$ |
15 |
$ |
3,627 |
$ |
105,914 |
$ |
19,083 |
$ |
(3,578) |
$ |
(10,354) |
$ |
114,707 |
(1,551) |
$ |
113,156 |
||||||||||||||||||||||
Stock issued |
1,942 |
0.004 |
8 |
- |
- |
- |
- |
8 |
8 |
|||||||||||||||||||||||||||||||
Net income (loss) |
- |
- |
- |
(521) |
- |
- |
- |
(521) |
66 |
(455) |
||||||||||||||||||||||||||||||
Net cash paid to |
- |
- |
- |
- |
- |
- |
1,101 |
1,101 |
- |
1,101 |
||||||||||||||||||||||||||||||
Foreign currency |
3,972 |
- |
3,972 |
34 |
4,006 |
|||||||||||||||||||||||||||||||||||
Balance at March |
14,800,140 |
$ |
15 |
$ |
3,635 |
$ |
105,393 |
$ |
19,083 |
$ |
394 |
$ |
(9,253) |
$ |
119,267 |
(1,451) |
$ |
117,816 |
||||||||||||||||||||||
Additional |
Retained Earnings |
Accumulated |
Amounts |
Total |
Non- |
|||||||||||||||||||||||||||||||||||
Common Stock |
paid-in |
Statutory |
Comprehensive |
related |
of the |
controlling |
Total |
|||||||||||||||||||||||||||||||||
Shares |
Amount |
capital |
Unrestricted |
reserve |
income |
party |
Company |
Interest |
equity |
|||||||||||||||||||||||||||||||
Balance at |
14,795,992 |
$ |
15 |
$ |
3,620 |
$ |
95,195 |
$ |
17,794 |
$ |
2,585 |
$ |
(15,449) |
$ |
103,760 |
(1,062) |
$ |
102,698 |
||||||||||||||||||||||
Net income (loss) |
- |
- |
- |
815 |
- |
- |
- |
815 |
(228) |
587 |
||||||||||||||||||||||||||||||
Net cash paid to |
- |
- |
- |
- |
- |
- |
(8,480) |
(8,480) |
- |
(8,480) |
||||||||||||||||||||||||||||||
Foreign currency |
4,023 |
- |
4,023 |
(94) |
3,929 |
|||||||||||||||||||||||||||||||||||
Balance at March |
14,795,992 |
$ |
15 |
$ |
3,620 |
$ |
96,010 |
$ |
17,794 |
$ |
6,608 |
$ |
(23,929) |
$ |
100,118 |
(1,384) |
$ |
98,734 |
||||||||||||||||||||||
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, 2019 AND 2018 (UNAUDITED) |
||||||||
2019 |
2018 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net income (loss) |
$ |
(455) |
$ |
587 |
||||
Adjustments to reconcile net income to cash provided by operating activities: |
||||||||
Depreciation and amortization |
2,225 |
2,537 |
||||||
Loss from sale of property and equipment |
52 |
4 |
||||||
Provision for obsolete inventories |
1,824 |
1,626 |
||||||
Deferred income tax |
(145) |
(234) |
||||||
Stock-based compensation |
8 |
- |
||||||
Changes in operating assets and liabilities |
||||||||
Accounts receivable |
31,027 |
28,466 |
||||||
Inventories |
10,557 |
(129) |
||||||
Value added tax receivable |
1,406 |
1,895 |
||||||
Other receivables and prepaid expenses |
3,975 |
832 |
||||||
Advances on inventory purchases |
490 |
(1,175) |
||||||
Amounts due from related parties |
103 |
(165) |
||||||
Accounts payable |
(26,505) |
(17,944) |
||||||
Accounts payable and other payables- related parties |
(741) |
(653) |
||||||
Other payables and accrued liabilities |
(9,565) |
(5,182) |
||||||
Value added and other taxes payable |
(2,788) |
(1,988) |
||||||
Income tax payable |
(327) |
(670) |
||||||
Net cash provided by operating activities |
11,141 |
7,807 |
||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Purchases of property and equipment |
(2,131) |
(2,552) |
||||||
Net cash used in investing activities |
(2,131) |
(2,552) |
||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Proceeds from bank loans |
6,029 |
17,346 |
||||||
Repayment of bank loans |
(7,408) |
(14,780) |
||||||
Repayment of loans from related party |
3,488 |
- |
||||||
Advances to related party |
(2,163) |
(7,692) |
||||||
Net cash used in financing activities |
(54) |
(5,126) |
||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
1,908 |
2,172 |
||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS |
10,864 |
2,301 |
||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
47,012 |
62,876 |
||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
57,876 |
$ |
65,177 |
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
||||||||
Cash paid during the period for: |
||||||||
Interest |
$ |
363 |
$ |
564 |
||||
Income taxes |
$ |
126 |
$ |
1,938 |
||||
SOURCE Ever-Glory International Group, Inc.
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