NANJING, China, Aug. 15, 2016 /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 second
quarter ended June 30, 2016.
Mr. Yihua Kang, Chairman,
President and Chief Executive Officer of Ever-Glory, said, "We are
pleased with our financial results in the second quarter with top
line increasing by 6.5% year-over-year and bottom line returning to
profitability. The strategic initiatives we have implemented in the
last few months have contributed to these solid results."
"Despite soft year-over-year retail sales, the performance of
this segment was within our expectation. In the second quarter, we
continued to execute our key strategies to maintain stability in
the retail business in the short term, while focusing on store
network optimization, inventory and operation management and
branding to drive profitable growth over the long run."
"Our second quarter wholesale sales grew by 26.9%
year-over-year, with strong results recorded in the United States, other European markets
(excluding Germany and the
United Kingdom) and China. We believe this reflects our recovery
efforts as we strive to strengthen product development and supply
chain management, as well as optimize our customer base by focusing
on high-quality mid-to-high end customers with good credit
histories. Looking at the remainder of 2016, we expect the
challenging market conditions to remain. We are committed to our
strategic initiatives and laying a firm foundation for a
sustainable and profitable business in the long term," concluded
Mr. Kang.
Mr. Jason Jiansong Wang, Chief
Financial Officer of Ever-Glory, added, "Our solid financial
performance reflects the prudent steps that we've taken to improve
our cost structure, resulting in decreased operating expenses as
percentage of total sales in the second quarter. Meanwhile, as part
of our effort to reduce inventory levels for our retail business,
we increased in-store discounts on out-of-season products during
the second quarter, which led to higher production costs as
percentage of retail sales and slightly impacted the gross margin
for the retail segment. As we remain committed to maximizing
operating efficiency and further reducing our inventory levels, we
are confident in our long-term growth prospects."
Second Quarter 2016 Financial Results
Total sales for the second quarter of 2016 were
$80.7 million, an increase of 6.5%
from $75.7 million in the second
quarter of 2015. This increase was primarily driven by a 26.9%
increase in our wholesale business partially offset by a 6.7%
decrease in our retail business.
Sales for the Company's branded fashion apparel retail
division decreased by 6.7% to $42.9
million for the second quarter of 2016, compared with
$45.9 million for the second quarter
of 2015. This decrease was primarily due to a decrease in the
same-store sales. The Company had 1,275 retail stores as of
June 30, 2016, compared with 1,204
retail stores as of June 30,
2015.
Sales for the Company's wholesale division
increased by 26.9% to $37.8 million
for the second quarter of 2016, compared with $29.8 million for the second quarter of 2015.
This increase was primarily due to an increase in sales in
the United States, other European
markets (excluding Germany and the
United Kingdom) and China, partially offset by a decrease in sales
in Germany and Japan.
Total gross profit for the second quarter of 2016
decreased by 11.1% to $26.7 million,
compared with $30.0 million for the
second quarter of 2015. Total gross margin decreased to 33.1% from
39.7% for the second quarter of 2015.
Gross profit for the retail business decreased by 13.4%
to $20.6 million for the second
quarter of 2016, compared with $23.8
million for the second quarter of 2015. Gross margin
decreased to 48.1% from 51.8% for the second quarter of 2015.
Gross profit for the wholesale business
decreased by 2.5% to $6.1 million for
the second quarter of 2016, compared with $6.2 million for the second quarter of 2015.
Gross margin decreased to 16.1% from 21.0% for the second quarter
of 2015.
Selling expenses for the second quarter of 2016 decreased
by 8.8% to $16.0 million, or 19.9% of
total sales, compared with $17.6
million, or 23.2% of total sales for the second quarter of
2015. This decrease was mainly attributable to lower retail sales
and a decrease in store management expense.
General and administrative expenses for the second
quarter of 2016 decreased by 3.8% to $7.3
million, or 9.1% of total sales, compared with $7.6 million, or 10.0% of total sales for the
second quarter of 2015.
Income from operations for the second quarter of 2016
decreased by 30.9% to $3.4 million
compared with $4.9 million for the
second quarter of 2015.
Net income attributable to the Company for
the second quarter of 2016 was $3.1
million compared with $3.6
million for the second quarter of 2015. Basic and diluted
earnings per share were $0.21 for the
second quarter of 2016 compared with $0.24 for the second quarter of 2015.
Balance Sheet
As of June 30, 2016, Ever-Glory
had approximately $27.5 million of
cash and cash equivalents, compared with approximately $22.7 million as of December 31, 2015. Ever-Glory had working capital
of approximately $53.8 million as of
June 30, 2016, and outstanding bank
loans of approximately $43.7 million
as of June 30, 2016.
Conference Call
The Company will hold a conference call at 8:00 a.m. Eastern Time on August 15, 2016 (8:00
p.m. Beijing Time on August 15,
2016). Listeners can access the conference call by dialing
+1-888-318-7451 or +1-719-457-2659 and using the access code
2412954. 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
August 15 through 11:59 p.m. Eastern Time on August 22, by dialing +1-877-870-5176 or
+1-858-384-5517 and using the access code 2412954.
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: +86-25-52096875
E-Mail: xxnfff@126.com
The Piacente Group, Inc.
Emilie Wu
China: +86-10-6535-0148
US: +1-212-481-2050
E-Mail: everglory@tpg-ir.com
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 JUNE 30,
2016 (UNAUDITED) AND DECEMBER 31, 2015
|
|
|
|
2016
|
|
|
2015
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
27,475
|
|
|
$
|
22,702
|
|
Accounts
receivable
|
|
|
62,233
|
|
|
|
87,527
|
|
Inventories
|
|
|
62,720
|
|
|
|
75,063
|
|
Value added tax
receivable
|
|
|
5,215
|
|
|
|
2,736
|
|
Other receivables and
prepaid expenses
|
|
|
4,899
|
|
|
|
3,840
|
|
Advances on inventory
purchases
|
|
|
3,658
|
|
|
|
6,193
|
|
Amounts due from
related parties
|
|
|
1,054
|
|
|
|
2,535
|
|
Total Current
Assets
|
|
|
167,254
|
|
|
|
200,596
|
|
|
|
|
|
|
|
|
|
|
INTANGIBLE
ASSETS
|
|
|
6,041
|
|
|
|
6,217
|
|
PROPERTY AND
EQUIPMENT, NET
|
|
|
23,791
|
|
|
|
21,906
|
|
TOTAL
ASSETS
|
|
$
|
197,086
|
|
|
$
|
228,719
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Bank loans
|
|
$
|
43,675
|
|
|
$
|
44,841
|
|
Accounts
payable
|
|
|
44,240
|
|
|
|
66,118
|
|
Accounts payable and
other payables - related parties
|
|
|
2,530
|
|
|
|
2,823
|
|
Other payables and
accrued liabilities
|
|
|
16,949
|
|
|
|
22,221
|
|
Value added and other
taxes payable
|
|
|
4,317
|
|
|
|
6,882
|
|
Income tax
payable
|
|
|
1,701
|
|
|
|
4,052
|
|
Total Current
Liabilities
|
|
|
113,412
|
|
|
|
146,937
|
|
|
|
|
|
|
|
|
|
|
NONCURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Deferred tax
liabilities
|
|
|
2,910
|
|
|
|
2,992
|
|
TOTAL
LIABILITIES
|
|
|
116,322
|
|
|
|
149,929
|
|
|
|
|
|
|
|
|
|
|
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,
14,787,940 and 14,785,868
shares issued and outstanding As of June
30, 2016 and December 31,
2015, respectively)
|
|
|
15
|
|
|
|
15
|
|
Additional paid-in
capital
|
|
|
3,602
|
|
|
|
3,597
|
|
Retained
earnings
|
|
|
81,223
|
|
|
|
78,439
|
|
Statutory
reserve
|
|
|
15,327
|
|
|
|
15,327
|
|
Accumulated other
comprehensive income
|
|
|
853
|
|
|
|
3,249
|
|
Amounts due from
related party
|
|
|
(19,967)
|
|
|
|
(21,776)
|
|
Total equity
attributable to stockholders of the Company
|
|
|
81,053
|
|
|
|
78,851
|
|
Noncontrolling
interest
|
|
|
(289)
|
|
|
|
(61)
|
|
Total
Equity
|
|
|
80,764
|
|
|
|
78,790
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$
|
197,086
|
|
|
$
|
228,719
|
|
EVER-GLORY
INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
|
(In thousands of
U.S. Dollars, except share and per share data or otherwise
stated)
|
FOR THE THREE AND
SIX MONTHS ENDED JUNE 30, 2016 AND 2015 (UNAUDITED)
|
|
|
|
Three months
ended
|
|
|
Six months
ended
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
NET
SALES
|
|
$
|
80,676
|
|
|
$
|
75,727
|
|
|
$
|
172,369
|
|
|
$
|
173,630
|
|
COST OF
SALES
|
|
|
53,961
|
|
|
|
45,679
|
|
|
|
117,311
|
|
|
|
112,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
26,715
|
|
|
|
30,048
|
|
|
|
55,058
|
|
|
|
60,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
16,043
|
|
|
|
17,583
|
|
|
|
36,956
|
|
|
|
37,838
|
|
General
and
administrative
expenses
|
|
|
7,316
|
|
|
|
7,606
|
|
|
|
14,265
|
|
|
|
14,520
|
|
Total
Operating
Expenses
|
|
|
23,359
|
|
|
|
25,189
|
|
|
|
51,221
|
|
|
|
52,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
FROM
OPERATIONS
|
|
|
3,356
|
|
|
|
4,859
|
|
|
|
3,837
|
|
|
|
8,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME
(EXPENSES)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
237
|
|
|
|
215
|
|
|
|
621
|
|
|
|
539
|
|
Interest
expense
|
|
|
(334)
|
|
|
|
(716)
|
|
|
|
(931)
|
|
|
|
(1,492)
|
|
Other
income
|
|
|
621
|
|
|
|
539
|
|
|
|
687
|
|
|
|
772
|
|
Total
Other
Income
(Expenses)
|
|
|
524
|
|
|
|
38
|
|
|
|
377
|
|
|
|
(181)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
BEFORE
INCOME
TAX
EXPENSE
|
|
|
3,880
|
|
|
|
4,897
|
|
|
|
4,214
|
|
|
|
8,117
|
|
Income tax
expense
|
|
|
(828)
|
|
|
|
(1,379)
|
|
|
|
(1,662)
|
|
|
|
(2,204)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
|
3,052
|
|
|
|
3,518
|
|
|
|
2,552
|
|
|
|
5,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to
the
non-controlling
interest
|
|
|
93
|
|
|
|
80
|
|
|
|
233
|
|
|
|
81
|
|
NET
INCOME
ATTRIBUTABLE
TO
THE
COMPANY
|
|
|
3,145
|
|
|
|
3,598
|
|
|
|
2,785
|
|
|
|
5,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
$
|
3,052
|
|
|
$
|
3,518
|
|
|
$
|
2,552
|
|
|
$
|
5,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency
translation (loss)
gain
|
|
|
(3,178)
|
|
|
|
(127)
|
|
|
|
(2,396)
|
|
|
|
329
|
|
COMPREHENSIVE
INCOME
|
|
|
(126)
|
|
|
|
3,391
|
|
|
|
156
|
|
|
|
6,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
attributable to
the
non-controlling
interest
|
|
|
85
|
|
|
|
80
|
|
|
|
228
|
|
|
|
81
|
|
COMPREHENSIVE
INCOME
(LOSS)
ATTRIBUTABLE
TO
THE
COMPANY
|
|
$
|
(41)
|
|
|
$
|
3,471
|
|
|
$
|
384
|
|
|
$
|
6,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS
PER
SHARE
ATTRIBUTABLE
TO THE
COMPANY'S
STOCKHOLDERS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
$
|
0.21
|
|
|
$
|
0.24
|
|
|
$
|
0.19
|
|
|
$
|
0.41
|
|
Weighted
average
number of
shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
14,787,302
|
|
|
|
14,784,094
|
|
|
|
14,786,589
|
|
|
|
14,784,094
|
|
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 SIX MONTHS
ENDED JUNE 30, 2016 AND 2015 (UNAUDITED)
|
|
|
|
2016
|
|
|
2015
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net income
|
|
$
|
2,552
|
|
|
$
|
5,913
|
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
3,331
|
|
|
|
4,678
|
|
Recovering for
doubtful accounts
|
|
|
-
|
|
|
|
(143)
|
|
Provision for
obsolete inventories
|
|
|
7,111
|
|
|
|
-
|
|
Deferred income
tax
|
|
|
(14)
|
|
|
|
3
|
|
Stock-based
compensation
|
|
|
5
|
|
|
|
-
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
23,903
|
|
|
|
34,101
|
|
Inventories
|
|
|
3,901
|
|
|
|
(7,266)
|
|
Value added tax
receivable
|
|
|
(2,583)
|
|
|
|
(1,333)
|
|
Other receivables and
prepaid expenses
|
|
|
(1,166)
|
|
|
|
865
|
|
Advances on inventory
purchases
|
|
|
2,434
|
|
|
|
1,055
|
|
Amounts due from
related parties
|
|
|
1,092
|
|
|
|
186
|
|
Accounts
payable
|
|
|
(20,847)
|
|
|
|
(13,416)
|
|
Accounts payable and
other payables- related parties
|
|
|
(275)
|
|
|
|
(1,074)
|
|
Other payables and
accrued liabilities
|
|
|
(4,852)
|
|
|
|
(1,987)
|
|
Value added and other
taxes payable
|
|
|
(2,448)
|
|
|
|
(779)
|
|
Income tax
payable
|
|
|
(2,297)
|
|
|
|
(1,099)
|
|
Net cash provided by
operating activities
|
|
|
9,847
|
|
|
|
19,704
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(5,692)
|
|
|
|
(5,438)
|
|
Proceeds from sale of
property and equipment
|
|
|
-
|
|
|
|
4
|
|
Purchase of
intangible assets
|
|
|
-
|
|
|
|
(1,732)
|
|
Acquisition of Yiduo
net of cash acquired
|
|
|
-
|
|
|
|
(457)
|
|
Net cash (used in)
investing activities
|
|
|
(5,692)
|
|
|
|
(7,623)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from bank
loans
|
|
|
48,295
|
|
|
|
52,715
|
|
Repayment of bank
loans
|
|
|
(48,521)
|
|
|
|
(72,217)
|
|
Repayment of loans
from related party
|
|
|
1,836
|
|
|
|
2,444
|
|
Advances to related
party
|
|
|
-
|
|
|
|
(815)
|
|
Net cash provided by
(used in) financing activities
|
|
|
1,610
|
|
|
|
(17,873)
|
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
|
|
(992)
|
|
|
|
(91)
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH
EQUIVALENTS
|
|
|
4,773
|
|
|
|
(5,883)
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF
PERIOD
|
|
|
22,702
|
|
|
|
34,134
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
|
27,475
|
|
|
$
|
28,251
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during
the period for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
931
|
|
|
$
|
1,492
|
|
Income
taxes
|
|
$
|
4,442
|
|
|
$
|
3,301
|
|
SUPPLEMENTAL
INFORMATION OF NONCASH
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Increase in
intangible assets and non-controlling interests
|
|
|
-
|
|
|
$
|
233
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ever-glory-reports-second-quarter-2016-financial-results-300313263.html
SOURCE Ever-Glory International Group, Inc.