Ever-Glory Reports Second Quarter 2021 Financial Results

NEW YORK, Aug. 13, 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 second quarter ended June 30, 2021.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "During the second 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 second 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 66 stores during 2021, we operated a nationwide network of 931 stores as of June 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 second 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."

Second Quarter 2021 Financial Results 

Total sales for the second quarter of 2021 were $60.6 million, an increase of 20.9% from $50.1 million in the second quarter of 2020. This increase was primarily driven by a 19.9% increase in our wholesale business and a 21.7% increase in retail business.

Sales for the Company's branded fashion apparel retail division increased by 21.7% to $34.1 million for the second quarter of 2021, compared with $28.0 million for the second quarter of 2020. This increase was primarily due to the increase in same-store sales. The Company operated 931 retail stores as of June 30, 2021, compared with 935 retail stores as of June 30, 2020.

Sales for the Company's wholesale division increased by 19.9% to $26.4 million for the second quarter of 2021, compared with $22.0 million for the second quarter of 2020. This increase was primarily attributable to increased sales in Mainland China, Hong Kong, the United Kingdom, and other European markets partially offset for decreased sales in Japan and the United States.

Total gross profit for the second quarter of 2021 increased by 27.3% to $18.4 million, compared with $14.4 million for the second quarter of 2020. Total gross margin for the second quarter of 2021 increased to 30.4% from 28.8% for the second quarter of 2020.

Gross profit for the retail business increased by 46.7% to $14.8 million for the second quarter of 2021, compared with $10.1 million for the second quarter of 2020. Gross margin for the second quarter of 2021 was 43.4% compared to 36.2% for the second quarter of 2020.

Gross profit for the wholesale business decreased by 17.5% to $3.6 million for the second quarter of 2021, compared with $4.4 million for the second quarter of 2020. Gross margin for the second quarter of 2021 decreased to 13.6% from 19.7% for the second quarter of 2020.

Selling expenses for the second quarter of 2021 increased by 14.9% to $14.5 million, or 24.0% of total sales, compared with $12.6 million, or 25.2% of total sales for the second quarter of 2020. The increase was attributable to the increased marketing expenses associated with the promotion of the retail brand.

General and administrative expenses for the second quarter of 2021 increased by 28.3% to $7.7 million, or 12.7% of total sales, compared with $6.0 million, or 11.9% of total sales for the second quarter of 2020. The increase was attributable to the decreased business trip and the exemption of social benefits by the PRC government during the COVID-19 outbreak in China 2020.

Loss from operations was $3.7 million for the second quarter of 2021, compared to $4.2 million for the second quarter of 2020.

Net loss attributable to the Company for the second quarter of 2021 was $1.8 million compared with $3.8 million for the second quarter of 2020. Basic and diluted loss per share were $0.12 for the second quarter of 2021 compared with $0.26 for the second quarter of 2020.

Balance Sheet 

As of June 30, 2021, Ever-Glory had approximately $64.0 million of cash and cash equivalents, compared with approximately $81.9 million as of December 31, 2020. Ever-Glory had working capital of approximately $48.9 million as of June 30, 2021, and outstanding bank loans of approximately $65.5 million as of June 30, 2021.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on August 13, 2021(8:00 p.m. Beijing Time on August 13, 2021). Listeners can access the conference call by dialing +1-800-263-0877 or + 1-646-828-8143 and using the access code 2633372. 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 11:00 a.m. Eastern Time on August 13 through 11:59 p.m. Eastern Time on August 20 by calling +1-844-512-2921 or +1-412-317-6671 with pin number 2633372.

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.

For investor and media inquiries, please contact:

Ever-Glory International Group
Dandan Song
Tel: +86-25-5209-6817
E-Mail: sdd@ever-glory.com.cn

 

 

 

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)







June 30,
2021



December 31,
2020


ASSETS














CURRENT ASSETS







Cash and cash equivalents


$

63,963



$

81,865


Restricted cash



42,725




39,858


Trading securities



3,581




1,792


Accounts receivable, net



39,643




53,285


Inventories



60,190




53,893


Advances on inventory purchases



7,556




10,261


Value added tax receivable



2,114




1,244


Other receivables and prepaid expenses



6,255




5,479


Amounts due from related parties



186




567


Total Current Assets



226,213




248,244











NON-CURRENT ASSETS









Equity security investment



5,929




3,932


Intangible assets, net



4,750




4,794


Property and equipment, net



33,414




32,164


Operating lease right-of-use assets



49,725




41,690


Deferred tax assets



306




902


Total Non-Current Assets



94,124




83,482


TOTAL ASSETS


$

320,337



$

331,726











LIABILITIES AND STOCKHOLDERS' EQUITY


















CURRENT LIABILITIES









Bank loans


$

65,498



$

65,919


Accounts payable



52,595




67,762


Accounts payable and other payables – related parties



2,131




3,764


Other payables and accrued liabilities



15,410




16,073


Value added and other taxes payable



-




909


Income tax payable



493




1,062


Current operating lease liabilities



41,174




33,481


Total Current Liabilities



177,301




188,970











NON-CURRENT LIABILITIES









Non-current operating lease liabilities



8,676




8,307


TOTAL LIABILITIES



185,977




197,277











COMMITMENTS AND CONTINGENCIES (Note 9)


















STOCKHOLDERS' EQUITY









Common stock ($0.001 par value, authorized 50,000,000 shares, 14,810,660 and
14,809,160 shares issued and outstanding as of June 30, 2021 and December 31,
2020, respectively)



15




15


Additional paid-in capital



3,655




3,650


Retained earnings



106,230




109,171


Statutory reserve



20,376




20,376


Accumulated other comprehensive income



6,672




4,590


Amounts due from related party



(2,588)




(3,353)


Total equity



134,360




134,449


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

320,337



$

331,726


 

 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited)

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)




Three months ended



Six months ended



June 30,



June 30,



2021



2020



2021



2020

NET SALES


$

60,555



$

50,086



$

131,369



$

108,441

COST OF SALES



42,163




35,641




90,541




77,958

















GROSS PROFIT



18,392




14,445




40,828




30,483

















OPERATING EXPENSES
















Selling expenses



14,503




12,626




30,052




26,105

General and administrative expenses



7,662




5,971




15,513




11,755

Total Operating Expenses



22,165




18,597




45,565




37,860

















LOSS FROM OPERATIONS



(3,773)




(4,152)




(4,737)




(7,377)

















OTHER INCOME (EXPENSES)
















Interest income



527




339




752




616

Interest expense



(200)




(566)




(692)




(907)

Government subsidy



243




231




502




691

Gain from changes in fair values of investments



2,041




4




2,275




4

Other income



477




610




774




968

Total Other Income, Net



3,088




618




3,611




1,372

















LOSS BEFORE INCOME TAX EXPENSE



(685)




(3,534)




(1,126)




(6,005)

















Income tax expense



(1,086)




(266)




(1,815)




(493)

















NET LOSS



(1,771)




(3,800)




(2,941)




(6,498)

















Net loss attributable to the non-controlling interest



-




6




-




3

NET LOSS ATTRIBUTABLE TO THE COMPANY



(1,771)




(3,794)




(2,941)




(6,495)

















NET LOSS


$

(1,771)



$

(3,800)



$

(2,941)



$

(6,498)

















Foreign currency translation gain (loss)



3,434




(263)




2,083




(1,700)

COMPREHENSIVE INCOME (LOSS)



1,663




(4,063)




(858)




(8,198)

















Comprehensive loss attributable to the non-controlling
   interest



-




8




-




2

COMPREHENSIVE
   INCOME  (LOSS) ATTRIBUTABLE TO THE
   COMPANY


$

1,663



$

(4,055)



$

(858)



$

(8,196)

















LOSS PER SHARE ATTRIBUTABLE TO THE
   COMPANY'S STOCKHOLDERS
















Basic and diluted


$

(0.12)



$

(0.26)



$

(0.20)



$

(0.44)

Weighted average number of shares outstanding Basic
   and diluted



14,810,660




14,804,832




14,810,330




14,804,595

 

 

 

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)







Additional



Retained Earnings



Accumulated
other



Amounts
due from



Total
equity
attributable
to stockholders



Non-







Common Stock



paid-in






Statutory



Comprehensive



related



of the



controlling



Total




Shares



Amount



capital



Unrestricted



reserve



loss



party



Company



Interest



equity


Balance at January  1, 
2021



14,809,160



$

15



$

3,650



$

109,171



$

20,376



$

4,590



$

(3,353)



$

134,449




-



$

134,449











































Stock issued
   for compensation



1,500




-




5




-




-




-




-




5








5


Net loss



-




-




-




(1,170)




-




-




-




(1,170)




-




(1,170)


Net cash received
   from related party
   under counter
   guarantee
   agreement



-




-




-




-




-




-




379




379




-




379


Foreign currency 
   translation
   adjustment























(1,352)




-




(1,352)




-




(1,352)


Balance at March 31,
   2021



14,810,660




15




3,655




108,001




20,376




3,238




(2,974)




132,311




-




132,311


Net income



-




-




-




(1,771)




-




-




-




(1,771)




-




(1,771)


Net cash received
   from related party
   under counter
   guarantee
   agreement



-




-




-




-




-




-




386




386




-




386


Foreign currency
   translation
   adjustment



-




-




-




-




-




3,434








3,434




-




3,434


Balance at June 30,
   2021



14,810,660



$

15



$

3,655



$

106,230



$

20,376



$

6,672



$

(2,588)



$

134,360




-



$

134,360
















































Additional



Retained Earnings



Accumulated
other



Amounts
due from



Total
equity
attributable
to stockholders



Non-







Common Stock



paid-in






Statutory



Comprehensive



related



of the



controlling



Total




Shares



Amount



capital



Unrestricted



reserve



loss



party



Company



Interest



equity


Balance at January  1, 
   2020



14,801,770



$

15



$

3,640



$

106,328



$

19,939



$

(4,330)



$

(4,932)



$

120,660




(1,510)



$

119,150











































Stock issued
   for compensation



3,062




0.003




5




-




-




-




-




5








5


Net income (loss)



-




-




-




(2,701)




-




-




-




(2,701)




3




(2,698)


Net cash received
   from related party
   under counter
   guarantee
   agreement



-




-




-




-




-




-




785




785




-




785


Foreign currency
   translation
   adjustment























(1,440)




-




(1,440)




3




(1,437)


Balance at March 31,
   2020



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 received
   from related party
   under counter
   guarantee
   agreement



























151




151








151


Foreign currency
   translation
   adjustment























(261)








(261)




(2)




(263)


Balance at June 30,
   2020



14,804,832



$

15



$

3,645



$

99,833



$

19,939



$

(6,031)



$

(3,996)



$

113,405




(1,512)



$

111,893


 

 

 

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)






Six Months Ended




June 30,
2021



June 30,
2020


CASH FLOWS FROM OPERATING ACTIVITIES







Net loss


$

(2,941)



$

(6,498)


Adjustments to reconcile net loss to cash provided by operating activities:









Depreciation and amortization



3,212




3,597


Loss from sale of property and equipment



463




189


Provision of bad debt allowance



652




969


Write off obsolete inventories



5,530




3,681


Changes in fair value of investment



(2,275)




-


Deferred income tax



604




71


Stock-based compensation



5




5


Changes in operating assets and liabilities









Accounts receivable



13,433




30,444


Inventories



(11,346)




11,659


Value added tax receivable



(562)




1,076


Other receivables and prepaid expenses



(632)




737


Advances on inventory purchases



2,928




3,845


Amounts due from related parties



546




(214)


Accounts payable



(17,753)




(22,522)


Accounts payable and other payables- related parties



(1,763)




(466)


Other payables and accrued liabilities



1,201




(7,027)


Value added and other taxes payable



(1,209)




(1,593)


Income tax payable



(581)




(910)


Net cash (used in) provided by operating activities



(10,488)




17,043











CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of property and equipment



(4,452)




(1,018)


Net (purchase) sale of trading securities



(1,468)




(825)


Net cash (used in) investing activities



(5,920)




(1,843)











CASH FLOWS FROM FINANCING ACTIVITIES









Proceeds from bank loans



12,841




31,995


Repayment of bank loans



(13,905)




(21,173)


Net collection (advance) of amounts due from related party (equity)



798




898


Net cash  (used in) provided by financing activities



(266)




11,720











EFFECT OF EXCHANGE RATE CHANGES ON CASH



1,639




(723)











NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND
   RESTRICTED CASH



(15,035)




26,197











CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF
   PERIOD



121,723




50,755











CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF
   PERIOD


$

106,688



$

76,952











Reconciliation of cash, cash equivalents and restricted cash reported within their
   consolidated balance sheets:


















Cash and Cash Equivalents



63,963




59,236


Restricted cash



42,725




17,716




$

106,688



$

76,952











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:









Cash paid during the period for:









Interest


$

692



$

907


Income taxes


$

1,781



$

493


 

Related Links :

http://www.everglorygroup.com