Ever Glory International : Glory Reports Second Quarter 2018 Financial Results

Ever-Glory Reports Second Quarter 2018 Financial Results

NANJING, China, August 14, 2018 /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, today reported its financial results for the second quarter ended June 30, 2018.Second Quarter 2018 Financial Results

Total salesfor the second quarter of 2018 were $88.5 million, an increase of 11.0% from $79.8 million in the second quarter of 2017. This increase was primarily driven by a 17.6% increase in our wholesale business and an 6.3% increase in retail business.

Sales for the Company's branded fashion apparel retail division increased by % to $million for the second quarter of 2018, compared with $million for the second quarter of 2017. This increase was primarily due to an increase in same-store sales. The Company had retail stores as of June 30, 2018, compared with retail stores as of June 30, 2017. Salesfor the Company's wholesale divisioncreased by % to $million for the second quarter of 2018, compared with $million for the second quarter of 2017. This was primarily attributable toan increase in sales in Mainland China, United Kingdom, United States and Japan, partially offset by a decrease in sales in Hong Kong, Germany and Europe other areas.

Total gross profit for the second quarter of 2018 creased by% to $million, compared with $million for the second quarter of 2017. Total gross margin increased to % from % for the second quarter of 2017.

Gross profit for the retail businessincreased by % to $million for the second quarter of 2018, compared with $million for the second quarter of 2017. Gross margin was %, compared to% for the second quarter of 2017.

Gross profitfor the wholesale businessby % to $million for the second quarter of 2018, compared with $million for the second quarter of 2017. Gross margin creased to % from % for the second quarter of 2017.Selling expensesfor the second quarter of 2018 increased by % to $million, or % of total sales, compared with $million, or % of total salesfor the second quarter of 2017. The increase was attributable to the increased store decoration and marketing expenses.

General and administrative expensesfor the second quarter of 2018 creased by 18.0% to $million, or % of total sales,compared with $million, or % of total salesfor the second quarter of 2017. The increase was mainly attributable to the increased average salaries.

Income from operationsfor the second quarter of 2018 increased by 6.1% to $million compared with $million for the second quarter of 2017.

Net income attributable to the Company for the second quarter of 2018 was $2.8 million compared with 2.7 million for the second quarter of 2017. Basic and diluted earnings per share were $0.19 for the second quarter of 2018 compared with basic and diluted earnings per share of $0.18 for the second quarter of 2017.

Balance Sheet

As of June 30, 2018, Ever-Glory had approximately $million of cash and cash equivalents, compared with approximately $million as of December 31, 2017. Ever-Glory had working capital of approximately $million as of June 30, 2018, and outstanding bank loans of approximately $million as of June 30, 2018.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on August 14, 2018(8:00 p.m. Beijing Time on August 14, 2018). Listeners can access the conference call by dialing [phone] or [phone] and using the access code 3000953. The conference call will also be webcast live over the Internet and can be accessed at the Company's website athttp://www.everglorygroup.com.

A replay of the conference call will be available from 11:00 a.m. Eastern Time on August 14 through 11:59 p.m. Eastern Time on August 21, by dialing [phone] or [phone] and using the access code 3000953.

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: [phone]

E-Mail: [e-mail]

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 JUNE 30, 2018 (UNAUDITED) AND DECEMBER 31, 2017

		2018				2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	36,439			$	62,876
Accounts receivable, net			61,072				81,859
Inventories			64,418				56,182
Value added tax receivable			3,037				3,757
Other receivables and prepaid expenses			13,771				5,139
Advances on inventory purchases			9,858				3,028
Amounts due from related parties			-				265
Total Current Assets			188,595				213,106
INTANGIBLE ASSETS			6,290				5,995
PROPERTY AND EQUIPMENT, NET			26,305				25,891
TOTAL ASSETS		$	221,190			$	244,992
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank loans		$	34,768			$	37,730
Accounts payable			58,745				73,788
Accounts payable and other payables - related parties			4,448				4,675
Other payables and accrued liabilities			23,440				16,454
Derivative financial instruments			469				-
Value added and other taxes payable			245				6,052
Income tax payable			777				1,712
Total Current Liabilities			122,892				140,411
NONCURRENT LIABILITIES
Deferred tax liabilities			1,039				1,883
TOTAL LIABILITIES			123,931				142,294
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Stockholders' equity:
Common stock $0.001 par value, authorized 50,000,000 shares, 14,795,992 and 14,795,992 shares issued and outstanding As of June 30, 2018 and December 31, 2017, respectively)			15				15
Additional paid-in capital			3,620				3,620
Retained earnings			98,786				95,195
Statutory reserve			17,794				17,794
Accumulated other comprehensive income			(48	)			2,585
Amounts due from related party			(21,589	)			(15,449	)
Total equity attributable to stockholders of the Company			98,578				103,760
Noncontrolling interest			(1,319	)			(1,062	)
Total Equity			97,259				102,698
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	221,190			$	244,992

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES CONDENSED

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, 2018 AND 2017 (UNAUDITED)

		Three months ended								Six months ended
		June 30,								June 30,
		2018				2017				2018				2017
NET SALES		$	88,541			$	79,771			$	181,326			$	164,891
COST OF SALES			53,999				49,121				115,439				105,732
GROSS PROFIT			34,542				30,650				65,887				59,159
OPERATING EXPENSES
Selling expenses			22,590				20,223				44,817				39,968
General and administrative expenses			8,823				7,479				16,496				14,734
Total Operating Expenses			31,413				27,702				61,313				54,702
INCOME FROM OPERATIONS			3,129				2,948				4,574				4,457
OTHER INCOME (EXPENSES)
Interest income			370				282				696				539
Interest expense			(360	)			(318	)			(924	)			(645	)
Other income			865				523				1,001				1,100
Total Other Income, Net			875				487				773				994
INCOME BEFORE INCOME TAX EXPENSE			4,004				3,435				5,347				5,451
Income tax expense			(1,285	)			(833	)			(2,041	)			(2,050	)
NET INCOME			2,719				2,602				3,306				3,401
Net loss attributable to the non-controlling interest			57				86				285				261
NET INCOME ATTRIBUTABLE TO THE COMPANY			2,776				2,688				3,591				3,662
NET INCOME		$	2,719			$	2,602			$	3,306			$	3,401
Foreign currency translation (loss) gain			(6,091	)			1,063				(2,068	)			1,522
Unrealized gain (loss) of derivative contracts designated as cash flow hedge			(469	)			-				(469	)			-
COMPREHENSIVE INCOME (LOSS)			(3,841	)			3,665				769				4,923
Comprehensive income(loss) attributable to the non-controlling interest			(13	)			98				309				278
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY		$	(3,854	)		$	3,763			$	1,078			$	5,201
EARNINGS PER SHARE ATTRIBUTABLE TO THE COMPANY'S STOCKHOLDERS
Basic and diluted		$	0.19			$	0.18			$	0.24			$	0.25
Weighted average number of shares outstanding Basic and diluted			14,795,992				14,792,836				14,795,992				14,791,240

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 SIX MONTHS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED)

		2018				2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	3,306			$	3,401
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization			4,903				3,481
Loss from sale of property and equipment			6				5
Provision of bad debt allowance			-				688
Provision for obsolete inventories			1,626				4,105
Deferred income tax			(843	)			(1,744	)
Stock-based compensation			-				10
Changes in operating assets and liabilities
Accounts receivable			20,150				13,865
Inventories			(10,873	)			(11,750	)
Value added tax receivable			681				(1,446	)
Other receivables and prepaid expenses			(8,942	)			(673	)
Advances on inventory purchases			(7,145	)			(2,684	)
Amounts due from related parties			1,117				(161	)
Accounts payable			(14,296	)			(7,542	)
Accounts payable and other payables- related parties			(1,485	)			(818	)
Other payables and accrued liabilities			8,006				(1,353	)
Value added and other taxes payable			(5,924	)			(4,048	)
Income tax payable			(942	)			(753	)
Net cash used in operating activities			(10,655	)			(7,417	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment			(6,295	)			(2,220	)
Net Cash (used in) provided by investing activities			(6,295	)			(2,220	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank loans			28,111				25,664
Repayment of bank loans			(30,533	)			(17,821	)
Repayment of loans from related party			2,556				482
Advances to related party			(8,734	)			(6,433	)
Net cash used in financing activities			(8,600	)			1,892
EFFECT OF EXCHANGE RATE CHANGES ON CASH			(887	)			310
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			(26,437	)			(7,435	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			62,876				45,288
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	36,439			$	37,853
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest		$	924			$	645
Income taxes		$	3,016			$	3,120