Ever-Glory Reports Third Quarter 2021 Financial Results
NEW YORK, Nov. 12, 2021 /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 third quarter ended September 30, 2021.
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 2021, 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 113 stores during 2021, we operated a nationwide network of 893 stores as of September 30, 2021."
"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," Mr. Kang concluded.
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 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."
Third Quarter 2021 Financial Results
Total sales for the third quarter of 2021 were $94.4 million, an increase of 18.1% from $79.9 million in the third quarter of 2020. This increase was primarily driven by a 38.0% increase in our wholesale business partially offset by a 7.6% decrease in retail business.
Sales for the Company's branded fashion apparel retail division decreased by 7.6% to $32.2 million for the third quarter of 2021, compared with $34.8 million for the third quarter of 2020. This decrease was primarily due to a decrease in the e-commerce sales. The Company operated 893 retail stores as of September 30, 2021, compared with 923 retail stores as of September 30, 2020.
Sales for the Company's wholesale division increased by 38.0% to $62.2 million for the third quarter of 2021, compared with $45.1 million for the third quarter of 2020. This increase was primarily attributable to an increase in sales in Mainland China, Europe-Other, Japan and United States partially offset by a decrease in sales in Hong Kong and United Kingdom.
Total gross profit for the third quarter of 2021 decreased by 2% to $23.2 million, compared with $23.7 million for the third quarter of 2020. Total gross margin for the third quarter of 2021 decreased to 24.6% from 29.6% for the third quarter of 2020.
Gross profit for the retail business decreased by 10.3% to $13.0 million for the third quarter of 2021, compared with $14.5 million for the third quarter of 2020. Gross margin for the third quarter of 2021 was 40.3% compared to 41.6% for the third quarter of 2020.
Gross profit for the wholesale business increased by 11.2% to $10.2 million for the third quarter of 2021, compared with $9.2 million for the third quarter of 2020. Gross margin for the third quarter of 2021 decreased to 16.4% from 20.4% for the third quarter of 2020.
Selling expenses for the third quarter of 2021 increased by 11.1% to $14.4 million, or 15.3% of total sales, compared with $13.0 million, or 16.3% of total sales for the third quarter of 2020. The increase was attributable to the higher travelling expenses.
General and administrative expenses for the third quarter of 2021 increased by 21.1% to $9.5 million, or 10% of total sales, compared with $7.8 million, or 9.8% of total sales for the third quarter of 2020. The increase was attributable to the increased salaries.
(Loss) Income from operations was ($0.7 million) for the third quarter of 2021, compared to $2.9 million for the third quarter of 2020.
Net loss attributable to the Company for the third quarter of 2021 was ($3.2 million) compared with $2.2 million for the third quarter of 2020. Basic and diluted loss per share were ($0.22) for the third quarter of 2021 compared with $0.15 for the third quarter of 2020.
Balance Sheet
As of September 30, 2021, Ever-Glory had approximately $48.3 million of cash and cash equivalents, compared with approximately $81.9 million as of December 31, 2020. Ever-Glory had working capital of approximately $44.6 million as of September 30, 2021, and outstanding bank loans of approximately $67.8 million as of September 30, 2021.
Conference Call
The Company will hold a conference call at 7:00 a.m. Eastern Time on November 12, 2021(8:00 p.m. Beijing Time on November 12, 2021). Listeners can access the conference call by dialing +1-800-289-0438 or +1-323-794-2423 and using the access code 7678571. 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 12 through 11:59 p.m. Eastern Time on November 19 by calling +1-844-512-2921 or +1-412-317-6671 with pin number 7678571.
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" 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 (Unaudited) |
||||||||
(In thousands of U.S. Dollars, except share and per share data or otherwise stated) |
||||||||
September 30, |
December 31, |
|||||||
ASSETS |
||||||||
CURRENT ASSETS |
||||||||
Cash and cash equivalents |
$ |
48,336 |
$ |
81,865 |
||||
Restricted cash |
43,176 |
39,858 |
||||||
Trading securities |
3,068 |
1,792 |
||||||
Accounts receivable, net |
61,525 |
53,285 |
||||||
Inventories |
67,275 |
53,893 |
||||||
Advances on inventory purchases |
9,864 |
10,261 |
||||||
Value added tax receivable |
2,484 |
1,244 |
||||||
Other receivables and prepaid expenses |
6,638 |
5,479 |
||||||
Amounts due from related parties |
1,994 |
567 |
||||||
Total Current Assets |
243,360 |
248,244 |
||||||
NON-CURRENT ASSETS |
||||||||
Equity security investment |
5,903 |
3,932 |
||||||
Intangible assets, net |
4,686 |
4,794 |
||||||
Property and equipment, net |
32,747 |
32,164 |
||||||
Operating lease right-of-use assets |
49,002 |
41,690 |
||||||
Deferred tax assets |
265 |
902 |
||||||
Other non-current assets |
771 |
- |
||||||
Total Non-Current Assets |
93,374 |
83,482 |
||||||
TOTAL ASSETS |
$ |
337,734 |
$ |
331,726 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
CURRENT LIABILITIES |
||||||||
Bank loans |
$ |
67,848 |
$ |
65,919 |
||||
Accounts payable |
73,120 |
67,762 |
||||||
Accounts payable and other payables – related parties |
1,016 |
3,764 |
||||||
Other payables and accrued liabilities |
13,758 |
16,073 |
||||||
Value added and other taxes payable |
554 |
909 |
||||||
Income tax payable |
1,900 |
1,062 |
||||||
Current operating lease liabilities |
40,590 |
33,481 |
||||||
Total Current Liabilities |
198,786 |
188,970 |
||||||
NON-CURRENT LIABILITIES |
||||||||
Non-current operating lease liabilities |
8,549 |
8,307 |
||||||
TOTAL LIABILITIES |
207,335 |
197,277 |
||||||
COMMITMENTS AND CONTINGENCIES (Note 9) |
||||||||
STOCKHOLDERS' EQUITY |
||||||||
Common stock ($0.001 par value, authorized 50,000,000 shares, 14,812,312 |
15 |
15 |
||||||
Additional paid-in capital |
3,660 |
3,650 |
||||||
Retained earnings |
103,013 |
109,171 |
||||||
Statutory reserve |
20,376 |
20,376 |
||||||
Accumulated other comprehensive income |
5,610 |
4,590 |
||||||
Amounts due from related party |
(2,275) |
(3,353) |
||||||
Total equity |
130,399 |
134,449 |
||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
337,734 |
$ |
331,726 |
||||
EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE |
||||||||||||||||
(In thousands of U.S. Dollars, except share and per share data or otherwise stated) |
||||||||||||||||
Three months ended |
Nine months ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
NET SALES |
$ |
94,406 |
$ |
79,908 |
$ |
225,776 |
$ |
188,350 |
||||||||
COST OF SALES |
71,196 |
56,235 |
161,738 |
134,193 |
||||||||||||
GROSS PROFIT |
23,210 |
23,673 |
64,038 |
54,157 |
||||||||||||
OPERATING EXPENSES |
||||||||||||||||
Selling expenses |
14,443 |
12,996 |
44,495 |
39,101 |
||||||||||||
General and administrative expenses |
9,467 |
7,818 |
24,980 |
19,574 |
||||||||||||
Total Operating Expenses |
23,910 |
20,814 |
69,475 |
58,675 |
||||||||||||
(LOSS) INCOME FROM OPERATIONS |
(700) |
2,859 |
(5,437) |
(4,518) |
||||||||||||
OTHER INCOME (EXPENSES) |
||||||||||||||||
Interest income |
176 |
313 |
928 |
930 |
||||||||||||
Interest expense |
(1,218) |
(700) |
(1,909) |
(1,607) |
||||||||||||
Government subsidy |
340 |
235 |
842 |
926 |
||||||||||||
(Loss) Gain from changes in fair values of |
(123) |
(4) |
2,151 |
- |
||||||||||||
Other income (expenses) |
253 |
343 |
1,027 |
1,310 |
||||||||||||
Total Other Income (expenses), Net |
(572) |
187 |
3,039 |
1,559 |
||||||||||||
(LOSS) INCOME BEFORE INCOME TAX |
(1,272) |
3,046 |
(2,398) |
(2,959) |
||||||||||||
Income tax expense |
(1,945) |
(822) |
(3,759) |
(1,315) |
||||||||||||
NET (LOSS) INCOME |
(3,217) |
2,224 |
(6,157) |
(4,274) |
||||||||||||
Net loss attributable to the non-controlling interest |
- |
(8) |
- |
(4) |
||||||||||||
NET LOSS ATTRIBUTABLE TO THE COMPANY |
(3,217) |
2,216 |
(6,157) |
(4,278) |
||||||||||||
NET (LOSS) INCOME |
$ |
(3,217) |
$ |
2,224 |
$ |
(6,157) |
$ |
(4,274) |
||||||||
Foreign currency translation gain (loss) |
(1,061) |
4,664 |
1,020 |
2,964 |
||||||||||||
COMPREHENSIVE INCOME (LOSS) |
(4,278) |
6,888 |
(5,137) |
(1,310) |
||||||||||||
Comprehensive loss attributable to the non-controlling |
- |
51 |
- |
53 |
||||||||||||
COMPREHENSIVE |
$ |
(4,278) |
$ |
6,939 |
$ |
(5,137) |
$ |
(1,257) |
||||||||
LOSS PER SHARE ATTRIBUTABLE TO THE |
||||||||||||||||
Basic and diluted |
$ |
(0.22) |
$ |
0.15 |
$ |
(0.42) |
$ |
(0.29) |
||||||||
Weighted average number of shares outstanding Basic |
14,811,073 |
14,808,737 |
14,810,585 |
14,805,987 |
||||||||||||
See the accompanying notes to the condensed consolidated financial statements.
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) |
||||||||||||||||||||||||||||||||||||
Addition |
Retained Earnings |
Accumulated |
Amoun |
Total |
||||||||||||||||||||||||||||||||
Common Stock |
paid-in |
Statutor |
Comprehens |
related |
of the |
Total |
||||||||||||||||||||||||||||||
Shares |
Amou |
capital |
Unrestrict |
reserve |
loss |
party |
Company |
equity |
||||||||||||||||||||||||||||
Balance at |
14,809,160 |
$ |
15 |
$ |
3,650 |
$ |
109,171 |
$ |
20,376 |
$ |
4,590 |
$ |
(3,353) |
$ |
134,449 |
$ |
134,449 |
|||||||||||||||||||
Stock issued |
1,500 |
- |
5 |
- |
- |
- |
- |
5 |
5 |
|||||||||||||||||||||||||||
Net loss |
- |
- |
- |
(1,170) |
- |
- |
- |
(1,170) |
(1,170) |
|||||||||||||||||||||||||||
Net cash |
- |
- |
- |
- |
- |
- |
379 |
379 |
379 |
|||||||||||||||||||||||||||
Foreign |
(1,352) |
- |
(1,352) |
(1,352) |
||||||||||||||||||||||||||||||||
Balance at |
14,810,660 |
15 |
3,655 |
108,001 |
20,376 |
3,238 |
(2,974) |
132,311 |
132,311 |
|||||||||||||||||||||||||||
Net loss |
(1,771) |
(1,771) |
(1,771) |
|||||||||||||||||||||||||||||||||
Net cash |
386 |
386 |
386 |
|||||||||||||||||||||||||||||||||
Foreign |
3,434 |
3,434 |
3,434 |
|||||||||||||||||||||||||||||||||
Balance at |
14,810,660 |
$ |
15 |
$ |
3,655 |
$ |
106,230 |
$ |
20,376 |
$ |
6,672 |
$ |
(2,588) |
$ |
134,360 |
$ |
134,360 |
|||||||||||||||||||
Stock issued |
1,652 |
- |
5 |
- |
- |
- |
- |
5 |
5 |
|||||||||||||||||||||||||||
Net (Loss) |
(3,217) |
(3,217) |
(3,217) |
|||||||||||||||||||||||||||||||||
Net cash |
313 |
313 |
313 |
|||||||||||||||||||||||||||||||||
Foreign |
(1,062) |
(1,062) |
(1,062) |
|||||||||||||||||||||||||||||||||
Balance at |
14,812,312 |
$ |
15 |
$ |
3,660 |
$ |
103,013 |
$ |
20,376 |
$ |
5,610 |
$ |
(2,275) |
$ |
130,399 |
$ |
130,399 |
|||||||||||||||||||
Additio |
Retained Earnings |
Accumulate |
Amount |
Total |
Non- |
|||||||||||||||||||||||||||||||||||
Common Stock |
paid-in |
Statuto |
Comprehen |
related |
of the |
controll |
Total |
|||||||||||||||||||||||||||||||||
Shares |
Amou |
capital |
Unrestric |
reserv |
loss |
party |
Company |
Interest |
equity |
|||||||||||||||||||||||||||||||
Balance at |
14,801,770 |
$ |
15 |
$ |
3,640 |
$ |
106,328 |
$ |
19,939 |
$ |
(4,330) |
$ |
(4,932) |
$ |
120,660 |
(1,510) |
$ |
119,150 |
||||||||||||||||||||||
Stock issued |
3,062 |
- |
5 |
- |
- |
- |
- |
5 |
5 |
|||||||||||||||||||||||||||||||
Net loss |
- |
- |
- |
(2,701) |
- |
- |
- |
(2,701) |
3 |
(2,698) |
||||||||||||||||||||||||||||||
Net cash |
- |
- |
- |
- |
- |
- |
785 |
785 |
- |
785 |
||||||||||||||||||||||||||||||
Foreign |
(1,440) |
- |
(1,440) |
3 |
(1,437) |
|||||||||||||||||||||||||||||||||||
Balance at |
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 |
151 |
151 |
151 |
|||||||||||||||||||||||||||||||||||||
Foreign |
(261) |
(261) |
(2) |
(263) |
||||||||||||||||||||||||||||||||||||
Balance at |
14,804,832 |
$ |
15 |
$ |
3,645 |
$ |
99,833 |
$ |
19,939 |
$ |
(6,031) |
$ |
(3,996) |
$ |
113,405 |
(1,512) |
$ |
111,893 |
||||||||||||||||||||||
Stock issued |
4,328 |
- |
5 |
- |
- |
- |
- |
5 |
5 |
|||||||||||||||||||||||||||||||
Net income |
2,216 |
2,216 |
8 |
2,224 |
||||||||||||||||||||||||||||||||||||
Net cash |
566 |
566 |
- |
566 |
||||||||||||||||||||||||||||||||||||
Foreign |
4,723 |
4,723 |
(59) |
4,664 |
||||||||||||||||||||||||||||||||||||
Balance at |
14,809,160 |
$ |
15 |
$ |
3,650 |
$ |
102,049 |
$ |
19,939 |
$ |
(1,308) |
$ |
(3,430) |
$ |
120,915 |
(1,563) |
$ |
119,352 |
||||||||||||||||||||||
EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
(In thousands of U.S. Dollars, except share and per share data or otherwise stated) |
||||||||
Nine Months Ended |
||||||||
September 30, |
September 30, |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net loss |
$ |
(6,157) |
$ |
(4,274) |
||||
Adjustments to reconcile net loss to cash provided by operating activities: |
||||||||
Depreciation and amortization |
4,384 |
4,114 |
||||||
Loss from sale of property and equipment |
590 |
283 |
||||||
Provision of bad debt allowance |
676 |
683 |
||||||
Write off obsolete inventories |
7,595 |
5,786 |
||||||
Changes in fair value of investment |
(2,151) |
13 |
||||||
Deferred income tax |
644 |
(165) |
||||||
Stock-based compensation |
10 |
10 |
||||||
Changes in operating assets and liabilities |
||||||||
Accounts receivable |
(8,614) |
15,571 |
||||||
Inventories |
(20,702) |
16,135 |
||||||
Value added tax receivable |
(1,235) |
(577) |
||||||
Other receivables and prepaid expenses |
(1,096) |
50 |
||||||
Advances on inventory purchases |
586 |
2,461 |
||||||
Amounts due from related parties |
(1,514) |
(848) |
||||||
Accounts payable |
5,930 |
(7,842) |
||||||
Accounts payable and other payables- related parties |
(3,204) |
(1,112) |
||||||
Other payables and accrued liabilities |
(3,332) |
(6,093) |
||||||
Value added and other taxes payable |
(360) |
467 |
||||||
Income tax payable |
831 |
(64) |
||||||
Net cash (used in) provided by operating activities |
(27,119) |
24,598 |
||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Purchases of property and equipment |
(5,109) |
(2,769) |
||||||
Net (purchase) sale of trading securities |
(1,077) |
(901) |
||||||
Investment payment |
(773) |
(2,860) |
||||||
Net cash (used in) investing activities |
(6,959) |
(6,530) |
||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Proceeds from bank loans |
56,110 |
66,599 |
||||||
Repayment of bank loans |
(54,565) |
(49,278) |
||||||
Net collection (advance) of amounts due from related party (equity) |
1,630 |
1,618 |
||||||
Net cash used in (provided by) financing activities |
3,175 |
18,939 |
||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
693 |
2,740 |
||||||
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND |
(30,211) |
39,747 |
||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT |
121,723 |
50,755 |
||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF |
$ |
91,512 |
$ |
90,502 |
||||
Reconciliation of cash, cash equivalents and restricted cash reported within |
||||||||
Cash and Cash Equivalents |
48,336 |
69,950 |
||||||
Restricted cash |
43,176 |
20,552 |
||||||
$ |
91,512 |
$ |
90,502 |
|||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
||||||||
Cash paid during the period for: |
||||||||
Interest |
$ |
1,909 |
$ |
1,607 |
||||
Income taxes |
$ |
2,272 |
$ |
1,455 |
||||
SOURCE Ever-Glory International Group, Inc.
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