06292017Headline:

Ever-Glory Reports First Quarter 2017 Financial Results

May 12, 2017 - (Newswire)

- 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, today reported its financial results for the first quarter ended March 31, 2017.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "In the first quarter, we continued to execute on the operational adjustments to our retail business in order to enhance efficiencies and increase profitability. Specifically, we accelerated our efforts to balance inventory turnover and sales while propelling our store network optimization by remodeling or relocating 27 stores during the first quarter with the rollout of our new store designs. As of March 31, 2017, we operated a nationwide network of 1,369 stores, and look forward to additional store remodels and relocations in the remaining of this year. In conjunction with our store-remodeling program, we have launched series of branding and promotional activities to synergize our online and offline resources and drive improved interaction between our online operations and offline sales."

"Although the first quarter is a seasonally slow quarter for our wholesale business, we are pleased to report notable gross margin improvement for the first quarter 2017, despite the significant topline pressure from seasonality and the slowdown of economies in our key global markets. Moving forward, we will continue to strengthen our original design manufacturing operations with seasoned expertise in extensive product development and one-stop supply chain management. We aim to further optimize our customer base with a goal of realizing margin expansion and elevated efficiency. Together with sourcing channels and manufacturers with high quality, reliability and cost-efficiency, we are committed to driving our wholesales business towards long-term sustainability," concluded Mr. Kang.

Mr. Jason Jiansong Wang, Chief Financial Officer of Ever-Glory, added, "The challenging consumer market conditions in the past few quarters have not stopped our devotion to maintaining a solid and efficient operation through the implementation of margin enhancement and cost control measures. Our efforts paid off in the first quarter 2017, as we achieved the year-over-year and sequential gross margin improvement of 260 and 40 basis points, respectively, as well as achieving net income of $1.0 million compared with a net loss in the year-ago period. In addition to the gross margin improvement in both retail and wholesales businesses, our retail business with higher gross margin has gained a greater proportion of our total sales in the first quarter, which indicates better operation mix that sets the foundation for sustainable and profitable operation."

First Quarter 2017 Financial Results

Total sales for the first quarter of 2017 were $85.1 million, a decrease of 7.2% from $ 91.7 million in the first quarter of 2016. This decrease was primarily driven by a 13.0% decrease in our wholesale business and a 3.9% decrease in retail business.

Sales for the Company's branded fashion apparel retail division decreased by 3.9% to $56.8 million for the first quarter of 2017, compared with $59.1 million for the first quarter of 2016. This decrease was primarily due to a decrease in same-store sales. The Company had 1,369 retail stores as of March 31, 2017, compared with 1,171 retail stores as of March 31, 2016.

Sales for the Company's wholesale division decreased by 13.0% to $28.3 million for the first quarter of 2017, compared with $32.6 million for the first quarter of 2016. This decrease was primarily due to a decrease in sales in Mainland China, Hong Kong, Japan and United States, partially offset by an increase in sales in Germany, the United Kingdom and other European markets.

Total gross profit for the first quarter of 2017 increased by 0.6% to $28.5 million, compared with $28.3 million for the first quarter of 2016. Total gross margin increased to 33.5% from 30.9% for the first quarter of 2016.

Gross profit for the retail business increased by 0.5% to $22.2 million for the first quarter of 2017, compared with $22.1 million for the first quarter of 2016. Gross margin increased to 39.1% from 37.4% for the first quarter of 2016.

Gross profit for the wholesale business increased by 1.1% to $6.3 million for the first quarter of 2017, compared with $6.2 million for the first quarter of 2016. Gross margin increased to 22.3% from 19.1% for the first quarter of 2016.

Selling expenses for the first quarter of 2017 decreased by 5.6% to $19.7 million, or 23.2% of total sales, compared with $20.9 million, or 22.8% of total sales for the first quarter of 2016. This decrease was mainly attributable to decreased store decoration and marketing expenses.

General and administrative expenses for the first quarter of 2017 increased by 4.4% to $7.3 million, or 8.5% of total sales, compared with $6.9 million, or 7.6% of total sales for the first quarter of 2016. The increase was attributable to the increased average salaries.

Income from operations for the first quarter of 2017 increased by 213.7% to $1.5 million compared with $0.5 million for the first quarter of 2016.

Net income (loss) attributable to the Company for the first quarter of 2017 was $1.0 million compared with a net loss of $0.4 million for the first quarter of 2016. Basic and diluted earnings per share were $0.07 for the first quarter of 2017 compared with basic and diluted loss per share of $0.02 for the first quarter of 2016.

Balance Sheet

As of March 31, 2017, Ever-Glory had approximately $60.1 million of cash and cash equivalents, compared with approximately $45.3 million as of December 31, 2016. Ever-Glory had working capital of approximately $57.9 million as of March 31, 2017, and outstanding bank loans of approximately $32.2 million as of March 31, 2017.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on May 12, 2017 (8:00 p.m. Beijing Time on May 12, 2017). Listeners can access the conference call by dialing +1-877-719-9799 or +1-719-325-4863 and using the access code 6268735. The conference call will also be webcast live over the Internet and can be accessed at the Company's website at www.everglorygroup.com.

A replay of the conference call will be available from 11:00 a.m. Eastern Time on May 12 through 11:59 p.m. Eastern Time on May 19, by dialing +1-844-512-2921 or +1-412-317-6671 and using the access code 6268735.

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
Yanhua Huang
Tel: +86-25-5209-6875
E-Mail: xxnfff@126.com

The Piacente Group, Inc.
Emilie Wu
China: +86-10-5730-6200
US: +1-212-481-2050
E-Mail: everglory@tpg-ir.com

View Table Fullscreen

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 MARCH 31, 2017 (UNAUDITED) AND DECEMBER 31, 2016




2017



2016


ASSETS







CURRENT ASSETS







Cash and cash equivalents


$

60,100



$

45,288


Accounts receivable



44,631




67,644


Inventories



40,347




49,630


Value added tax receivable



1,726




2,938


Other receivables and prepaid expenses



4,158




3,674


Advances on inventory purchases



4,892




3,139


Amounts due from related parties



563




486


Total Current Assets



156,417




172,799











INTANGIBLE ASSETS



5,776




5,769


PROPERTY AND EQUIPMENT, NET



21,947




22,694


TOTAL ASSETS


$

184,140



$

201,262











LIABILITIES AND STOCKHOLDERS' EQUITY


















CURRENT LIABILITIES









Bank loans


$

32,212



$

29,232


Accounts payable



46,843




58,170


Accounts payable and other payables - related parties



2,541




4,337


Other payables and accrued liabilities



13,329




15,007


Value added and other taxes payable



2,450




5,118


Income tax payable



1,096




1,842


Total Current Liabilities



98,471




113,706











NONCURRENT LIABILITIES









Deferred tax liabilities



2,100




3,254


TOTAL LIABILITIES



100,571




116,960











COMMITMENTS AND CONTINGENCIES


















STOCKHOLDERS' EQUITY









Stockholders' equity:









Preferred stock ($.001 par value, authorized 5,000,000 shares, no shares issued
and outstanding)



-




-


Common stock ($.001 par value, authorized 50,000,000 shares, 14,792,836 and
14,787,940 shares issued and outstanding As of March 31, 2017 and December
31, 2016, respectively)



15




15


Additional paid-in capital



3,612




3,602


Retained earnings



84,398




83,423


Statutory reserve



17,107




17,107


Accumulated other comprehensive income



(2,837)




(3,297)


Amounts due from related party



(17,934)




(15,936)


Total equity attributable to stockholders of the Company



84,361




84,914


Noncontrolling interest



(792)




(612)


Total Equity



83,569




84,302


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

184,140



$

201,262


View Table Fullscreen

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 THREE MONTHS ENDED MARCH 31, 2017 AND 2016 (UNAUDITED)




2017



2016









SALES


$

85,120



$

91,693











COST OF SALES



56,611




63,350











GROSS PROFIT



28,509




28,343











OPERATING EXPENSES









Selling expenses



19,745




20,913


General and administrative expenses



7,255




6,949


Total operating expenses



27,000




27,862











INCOME FROM OPERATIONS



1,509




481











OTHER INCOME (EXPENSE)









Interest income



257




384


Interest expense



(327)




(597)


Other income



577




67


Total other expenses



507




(146)











INCOME BEFORE INCOME TAX EXPENSE



2,016




335











INCOME TAX EXPENSE



(1,217)




(835)











NET (LOSS) INCOME



799




(500)


Net loss attributable to the non-controlling interest



175




140


NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY


$

974



$

(360)











NET (LOSS) INCOME


$

799



$

(500)


Foreign currency translation income



459




782


COMPREHENSIVE INCOME


$

1,258



$

282











Comprehensive loss attributable to the noncontrolling interest



180




143











COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY


$

1,438



$

425


(LOSS) EARNINGS PER SHARE:









Basic and diluted


$

0.07



$

(0.02)


Weighted average number of shares outstanding Basic and diluted



14,789,626




14,785,868


View Table Fullscreen

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 THREE MONTHS ENDED MARCH 31, 2017 AND 2016 (UNAUDITED)




2017



2016


CASH FLOWS FROM OPERATING ACTIVITIES







Net (loss) income


$

799



$

(500)


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









Depreciation and amortization



2,241




1,758


Provision for obsolete inventories



-




2,098


Deferred income tax



(1,180)




(285)


Stock-based compensation



10




-


Changes in operating assets and liabilities









Accounts receivable



23,487




30,037


Inventories



9,646




7,443


Value added tax receivable



1,236




799


Other receivables and prepaid expenses



(543)




(3,163)


Advances on inventory purchases



(1,730)




2,196


Amounts due from related parties



(495)




552


Accounts payable



(11,762)




(19,781)


Accounts payable and other payables- related parties



(1,527)




(517)


Other payables and accrued liabilities



(1,794)




(2,484)


Value added and other taxes payable



(2,713)




(1,653)


Income tax payable



(755)




(1,693)


Net cash provided by operating activities



14,920




14,807











CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of property and equipment



(1,209)




(1,633)


Proceeds from sale of property and equipment



5




-


Net cash used in investing activities



(1,204)




(1,633)











CASH FLOWS FROM FINANCING ACTIVITIES









Proceeds from bank loans



15,671




23,593


Repayment of bank loans



(12,913)




(26,250)


Repayment of loans from related party



-




917


Advances to related party



(1,742)




-


Net cash used in financing activities



1,016




(1,740)











EFFECT OF EXCHANGE RATE CHANGES ON CASH



80




503











NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS



14,812




11,937











CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD



45,288




22,702











CASH AND CASH EQUIVALENTS AT END OF PERIOD


$

60,100



$

34,639











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:


















Cash paid during the period for:









Interest


$

327



$

597


Income taxes


$

1,853



$

2,851


SOURCE Ever-Glory International Group, Inc.

Related Links

www.everglorygroup.com

Original Source: https://www.newswire.com/news/ever-glory-reports-first-quarter-2017-financial-results

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