Ever-Glory Reports Fourth Quarter and Full Year 2017 Financial Results
- Full year 2017 retail revenue increased by 10.2% year-over-year to $225.3 million
- Full year 2017 net income attributable to the Company increased by 84.2% to $12.5 million
NANJING, China, March 28, 2018 /PRNewswire/ -- Ever-Glory International Group, Inc. (the "Company" or "Ever-Glory") (NASDAQ-GM: EVK), a retailer of branded fashion apparel and a leading global apparel supply chain solution provider, today reported its financial results for the fourth quarter and full year ended December 31, 2017.
Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "We are very pleased to announce the 2017 full year results with a 10.2% year-over-year increase in retail sales and a 1.1% year-over-year increase in wholesale sales. Notably, we achieved full year net income attributable to the Company of $12.5 million, representing an 84.2% year-over-year increase from 2016. In addition, we closed out the fourth quarter with an 18.2% year-over-year growth of our total sales, capping a year of sequential quarterly growth. I'm encouraged by the performance achieved in 2017 as our teams executed well across all parts of the business.
"Our four retail brands continue to attract new customers and retain existing customers by focusing on design, quality and value," Mr. Kang continued. Our inventory management strategy continually improves the balance between inventory turnover and sales growth, and our diligent cost control measures further strengthen the profitability of our business. The results we've seen this year make me very confident and very optimistic in our retail business' future growth prospects."
"Looking at our wholesale business, while total revenue remained relatively flat for 2017 compared with 2016, wholesale gross margin continued to improve on a year-over-year basis. The overall market conditions in many of our key global markets remained challenging. However, we experienced encouraging sales results from Hong Kong, Germany and the United States in 2017. Although the overall consumption market remains weak, I firmly believe in our product development and supply chain management capabilities to drive the future growth of our wholesales business," concluded Mr. Kang.
Mr. Jason Jiansong Wang, Chief Financial Officer of Ever-Glory, added, "Our relentless efforts have been paying off evidenced by solid 2017 full year results and furthermore, operating efficiency continued to improve in 2017, demonstrating our ability to control costs in the weak market environment. Overall gross margin increased by 180 basis points, with retail gross margin and wholesale gross margin increasing by 110 basis points and 140 basis points respectively, compared with 2016. Looking at 2018, we look forward to further strengthening the fundamentals and increasing operating leverage to support the long-term profitability of our business."
Fourth Quarter 2017 Financial Results
Total sales for the fourth quarter of 2017 were $130.4 million, an increase of 18.2% from $110.4 million in the fourth quarter of 2016. This increase was primarily driven by a 22.3% increase in our wholesale business and a 14.9% increase in retail business.
Sales for the Company's branded fashion apparel retail division increased by 14.9% to $70.5 million for the fourth quarter of 2017, compared with $61.4 million for the fourth quarter of 2016. This increase was primarily due to an increase in same-store sales. The Company had 1,400 retail stores as of December 31, 2017, compared with 1,378 retail stores as of December 31, 2016.
Sales for the Company's wholesale division increased by 22.3% to $60.0 million for the fourth quarter of 2017, compared with $49.0 million for the fourth quarter of 2016. This increase was primarily attributable to an increase in sales in Hong Kong China, the United States and Mainland China partially offset by a decrease in sales in Japan, the United Kingdom, Europe-other and Germany.
Total gross profit for the fourth quarter of 2017 increased by 18.8% to $43.3 million, compared with $36.5 million for the fourth quarter of 2016. Total gross margin increased to 33.2% from 33.1% for the fourth quarter of 2016.
Gross profit for the retail business increased by 14.9% to $29.6 million for the fourth quarter of 2017, compared with $25.8 million for the fourth quarter of 2016. Gross margin remained flat at 42.0% for the fourth quarter of 2017 and 2016.
Gross profit for the wholesale business increased by 28.2% to $13.7 million for the fourth quarter of 2017, compared with $10.7 million for the fourth quarter of 2016. Gross margin increased to 22.9% from 21.8% for the fourth quarter of 2016.
Selling expenses for the fourth quarter of 2017 increased by 17.4% to $25.7 million, or 19.7% of total sales, compared with $21.9 million, or 19.9% of total sales for the fourth quarter of 2016. This increase was mainly attributable to higher retail sales.
General and administrative expenses for the fourth quarter of 2017 increased by 2.4% to $10.2 million, or 7.8% of total sales, compared with $9.9 million, or 9.0% of total sales for the fourth quarter of 2016.
Income from operations for the fourth quarter of 2017 increased by 60.6% to $7.4 million compared with $4.7 million for the fourth quarter of 2016.
Net income attributable to the Company for the fourth quarter of 2017 was $5.5 million compared with $3.4 million for the fourth quarter of 2016. Basic and diluted earnings per share were $0.37 for the fourth quarter of 2017 compared with $0.23 for the fourth quarter of 2016.
Full Year 2017 Financial Results
Total sales for the full year of 2017 were $415.6 million, a 5.8% increase from $392.7 million in the full year of 2016. This increase was primarily due to a 10.2% increase in retail sales and a 1.1% increase in wholesale sales.
Retail sales from the Company's branded fashion apparel retail division increased by 10.2% to $225.3 million for the full year of 2017, compared with $204.4 million for the full year of 2016. This increase was primarily due to an increase in same store sales.
Wholesale sales from the Company's wholesale business increased by 1.1% to $190.2 million for the full year of 2017, compared with $188.2 million for the full year of 2016. This increase was primarily due to increased sales in Hong Kong China, Germany, the United States and Mainland China, partially offset by decreased sales in Japan, Europe-other and the United Kingdom.
Total gross profit for the full year of 2017 increased by 12.0% to $135.7 million, compared with $121.2 million for the full year of 2016. Total gross margin for the full year of 2017 increased to 32.7% from 30.9% for the full year of 2016.
Gross profit for retail business increased by 13.1% to $99.6 million for the full year of 2017, compared with $88.1 million for the full year of 2016. Gross margin for the full year of 2017 increased to 44.2% from 43.1% for the full year of 2016.
Gross profit for wholesale business increased by 9.2% to $36.1 million for the full year of 2017, compared with $33.1 million for the full year of 2016. Gross margin for the full year of 2017 increased to 19.0% compared with 17.6% for the full year of 2016.
Selling expenses for the full year of 2017 increased by 11.0% to $85.9 million, or 20.7% of total sales, compared with $77.4 million, or 19.7% of total sales for the full year of 2016. The increase was attributable to higher retail sales.
General and administrative expenses for the full year of 2017 increased by 3.0% to $35.1 million, or 8.4% of total sales, compared with $34.0 million, or 8.7% of total sales for the full year of 2016. The increase was mainly due to increased average salaries.
Income from operations for the full year of 2017 increased by 51.7% to $14.7 million compared with $9.7 million for the full year of 2016.
Net income attributable to the Company for the full year of 2017 increased by 84.2% to $12.5 million compared with $6.8 million for the full year of 2016. Basic and diluted earnings per share were $0.84 and $0.46 for the full year of 2017 and 2016, respectively.
Balance Sheet
As of December 31, 2017, Ever-Glory had approximately $62.9 million of cash and cash equivalents, compared with approximately $45.3 million as of December 31, 2016. Ever-Glory had working capital of approximately $72.7 million as of December 31, 2017, and outstanding bank loans of approximately $37.7 million as of December 31, 2017.
Conference Call
The Company will hold a conference call at 8:00 a.m. Eastern Time on March 28, 2018 (8:00 p.m. Beijing Time on March 28, 2018). Listeners can access the conference call by dialing +1-866-548-4713 or +1-323-794-2093 and using the access code 1797415. 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 28 through 11:59 p.m. Eastern Time on April 4, by dialing +1-844-512-2921 or +1-412-317-6671 and using the access code 1797415.
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]
The Piacente Group, Inc.
Emilie Wu
China: +86-10-5730-6200
US: +1-212-481-2050
E-Mail: [email protected]
| 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, 2017 AND 2016 |
|||||
| 2017 |
2016 |
||||
| ASSETS |
|||||
| CURRENT ASSETS |
|||||
| Cash and cash equivalents |
$ |
62,876 |
$ |
45,288 |
|
| Accounts receivable, net |
81,859 |
67,644 |
|||
| Inventories |
56,182 |
49,630 |
|||
| Value added tax receivable |
3,757 |
2,938 |
|||
| Other receivables and prepaid expenses |
5,139 |
3,674 |
|||
| Advances on inventory purchases |
3,028 |
3,139 |
|||
| Amounts due from related parties |
265 |
486 |
|||
| Total Current Assets |
213,106 |
172,799 |
|||
| INTANGIBLE ASSETS |
5,995 |
5,769 |
|||
| PROPERTY AND EQUIPMENT, NET |
25,891 |
22,694 |
|||
| TOTAL ASSETS |
$ |
244,992 |
$ |
201,262 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
| CURRENT LIABILITIES |
|||||
| Bank loans |
$ |
37,730 |
$ |
29,232 |
|
| Accounts payable |
73,788 |
58,170 |
|||
| Accounts payable and other payables - related parties |
4,675 |
4,337 |
|||
| Other payables and accrued liabilities |
16,454 |
15,007 |
|||
| Value added and other taxes payable |
6,052 |
5,118 |
|||
| Income tax payable |
1,712 |
1,842 |
|||
| Total Current Liabilities |
140,411 |
113,706 |
|||
| NONCURRENT LIABILITIES |
|||||
| Deferred tax liabilities |
1,883 |
3,254 |
|||
| TOTAL LIABILITIES |
142,294 |
116,960 |
|||
| COMMITMENTS AND CONTINGENCIES |
|||||
| STOCKHOLDERS' EQUITY |
|||||
| Stockholders' equity: |
|||||
| Preferred stock ($.001 par value, authorized 5,000,000 shares, no shares |
- |
- |
|||
| Common stock ($.001 par value, authorized 50,000,000 shares, 14,795,992 |
15 |
15 |
|||
| Additional paid-in capital |
3,620 |
3,602 |
|||
| Retained earnings |
95,195 |
83,423 |
|||
| Statutory reserve |
17,794 |
17,107 |
|||
| Accumulated other comprehensive income |
2,585 |
(3,297) |
|||
| Amounts due from related party |
(15,449) |
(15,936) |
|||
| Total equity attributable to stockholders of the Company |
103,760 |
84,914 |
|||
| Noncontrolling interest |
(1,062) |
(612) |
|||
| Total Equity |
102,698 |
84,302 |
|||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
244,992 |
$ |
201,262 |
|
| 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, 2017 AND 2016 |
|||||
| 2017 |
2016 |
||||
| SALES |
$ |
415,581 |
$ |
392,666 |
|
| COST OF SALES |
279,839 |
271,506 |
|||
| GROSS PROFIT |
135,742 |
121,160 |
|||
| OPERATING EXPENSES |
|||||
| Selling expenses |
85,940 |
77,398 |
|||
| General and administrative expenses |
35,053 |
34,042 |
|||
| Total operating expenses |
120,993 |
111,440 |
|||
| INCOME FROM OPERATIONS |
14,749 |
9,720 |
|||
| OTHER INCOME (EXPENSE) |
|||||
| Interest income |
1,260 |
1,059 |
|||
| Interest expense |
(1,648) |
(1,997) |
|||
| Other income |
3,509 |
1,479 |
|||
| Total other income |
3,121 |
541 |
|||
| INCOME BEFORE INCOME TAX EXPENSE |
17,870 |
10,261 |
|||
| INCOME TAX EXPENSE |
(5,805) |
(4,077) |
|||
| NET INCOME |
12,065 |
6,184 |
|||
| Net loss attributable to the non-controlling interest |
394 |
580 |
|||
| NET INCOME ATTRIBUTABLE TO THE COMPANY |
$ |
12,459 |
$ |
6,764 |
|
| NET INCOME |
$ |
12,065 |
$ |
6,184 |
|
| Foreign currency translation gain (loss) |
5,882 |
(6,546) |
|||
| COMPREHENSIVE INCOME (LOSS) |
$ |
17,947 |
$ |
(362) |
|
| Comprehensive loss attributable to the noncontrolling interest |
450 |
612 |
|||
| COMPREHENSIVE INCOME ATTRIBUTABLE TO THE |
$ |
18,397 |
$ |
250 |
|
| EARNINGS PER SHARE ATTRIBUTABLE TO THE COMPANY'S |
|||||
| Basic and diluted |
$ |
0.84 |
$ |
0.46 |
|
| Weighted average number of shares outstanding Basic and diluted |
14,795,992 |
14,787,270 |
|||
| 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, 2017 AND 2016 |
|||||
| 2017 |
2016 |
||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
|||||
| Net income |
$ |
12,065 |
$ |
6,184 |
|
| Adjustments to reconcile net income to cash provided by operating activities: |
|||||
| Depreciation and amortization |
7,015 |
7,915 |
|||
| Loss from sale of property and equipment |
24 |
41 |
|||
| Provision of bad debt allowance |
1,223 |
1,976 |
|||
| Provision for obsolete inventories |
4,624 |
7,111 |
|||
| Deferred income tax |
(1,530) |
477 |
|||
| Stock-based compensation |
18 |
5 |
|||
| Changes in operating assets and liabilities |
|||||
| Accounts receivable |
(11,204) |
13,402 |
|||
| Inventories |
(7,919) |
14,630 |
|||
| Value added tax receivable |
(600) |
(398) |
|||
| Other receivables and prepaid expenses |
(1,136) |
779 |
|||
| Advances on inventory purchases |
307 |
2,773 |
|||
| Amounts due from related parties |
(592) |
1,830 |
|||
| Accounts payable |
11,489 |
(4,042) |
|||
| Accounts payable and other payables- related parties |
351 |
953 |
|||
| Other payables and accrued liabilities |
460 |
(6,058) |
|||
| Value added and other taxes payable |
567 |
(1,372) |
|||
| Income tax payable |
(238) |
(2,039) |
|||
| Net cash provided by operating activities |
14,924 |
44,167 |
|||
| CASH FLOWS FROM INVESTING ACTIVITIES |
|||||
| Purchase of property and equipment |
(8,564) |
(11,016) |
|||
| Net cash used in investing activities |
(8,564) |
(11,016) |
|||
| CASH FLOWS FROM FINANCING ACTIVITIES |
|||||
| Proceeds from bank loans |
62,693 |
102,519 |
|||
| Repayment of bank loans |
(56,296) |
(115,839) |
|||
| Repayment of loans from related party |
9,280 |
4,816 |
|||
| Advances to related party |
(7,119) |
(1,204) |
|||
| Interest income received from related party |
- |
1,956 |
|||
| Net cash provided by (used in) financing activities |
8,558 |
(7,752) |
|||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH |
2,670 |
(2,813) |
|||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
17,588 |
22,586 |
|||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
45,288 |
22,702 |
|||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
62,876 |
$ |
45,288 |
|
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|||||
| Cash paid during the period for: |
|||||
| Accrued interest income on amounts due from related party under counter- |
$ |
818 |
$ |
795 |
|
| Interest |
$ |
1,648 |
$ |
1,997 |
|
| Income taxes |
$ |
6,247 |
$ |
6,987 |
|
SOURCE Ever-Glory International Group, Inc.
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