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Ever-Glory Reports First Quarter 2022 Financial Results

  • Friday, May 13, 2022, 5:00 pm
  • ACROFAN=PRNewswire
  • mediainquiries@prnewswire.com

NEW YORK, May 13, 2022 /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 first quarter ended March 31, 2022.


Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "During the first 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 first quarter of 2022, 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 50-100 stores during 2022, we operated a nationwide network of 848 stores as of March 31, 2022."


"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." concluded Mr. Kang.


Mr. Jason Jiansong Wang, Chief Financial Officer of Ever-Glory, added, "The first quarter results, are coupled with our ability to increase operating leverage. Going forward, we remain confident 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."


First Quarter 2022 Financial Results 


Total sales for the first quarter of 2022 were $64.8 million,  a decrease of 8.5% from $70.8 million in the first quarter of 2021. This decrease was primarily attributable to a 28.7% increase in our wholesale business and a 26.7% decrease in our retail business.


Sales for the Company's branded fashion apparel retail division decreased by 26.7% to $34.9 million for the first quarter of 2022, compared with $47.6 million for the first quarter of 2021. This decrease was primarily due to the decrease in same-store sales. The Company had 848 retail stores as of March 31, 2022, compared with 921 retail stores as of March 31, 2021.


Sales for the Company's wholesale division increased by 28.7% to $29.9 million for the first quarter of 2022, compared with $23.2 million for the first quarter of 2021. This increase was primarily attributable to increased sales in Mainland China, Hong Kong, Japan and the United States, and other European markets partially offset by decreased sales in the United Kingdom.


Total gross profit for the first quarter of 2021 decreased by 22.6% to $17.4 million, compared with $22.4 million for the first quarter of 2021. Total gross margin for the first quarter of 2022 decreased to 26.8% from 31.7% for the first quarter of 2021.


Gross profit for the retail business decreased by 34.8% to $11.7 million for the first quarter of 2022, compared with $17.9 million for the first quarter of 2021. Gross margin for the first quarter of 2022 was 33.4% compared to 37.6% for the first quarter of 2021.


Gross profit for the wholesale business increased by 25.2% to $5.7 million for the first quarter of 2022, compared with $4.6 million for the first quarter of 2021. Gross margin for the first quarter of 2022 decreased to 19.1% from 19.6% for the first quarter of 2021.


Selling expenses for the first quarter of 2022 decreased by 12.0% to $13.7 million, or 21.1% of total sales, compared with $15.5 million, or 22.0% of total sales for the first quarter of 2021. The decrease was attributable to the decreased salaries.


General and administrative expenses for the first quarter of 2022 decreased by 10.9% to $7.0 million, or 10.8% of total sales, compared with $7.9 million, or 11.1% of total sales for the first quarter of 2021. The decrease was attributable to the decreased salaries.


Loss from operations was $3.3 million for the first quarter of 2022,compared to $1.0 million for the first quarter of 2021.


Net loss attributable to the Company for the first quarter of 2022 was $5.1 million compared with $1.2 million for first quarter of 2021. Basic and diluted loss  per share were $0.34 for the first quarter of 2022 compared with $0.08 for the first quarter of 2021.


Balance Sheet


As of March 31, 2022, Ever-Glory had approximately $41.7 million of cash and cash equivalents, compared with approximately $56.6 million as of December 31, 2021. Ever-Glory had working capital of approximately $42.3 million as of March 31, 2022, and outstanding bank loans of approximately $69.3 million as of March 31, 2022.


Conference Call


The Company will hold a conference call at 8:00 a.m. Eastern Time on May 13, 2022(8:00 p.m. Beijing Time on May 13, 2022). Listeners can access the conference call by dialing +1-888-394-8218 or + 1-323-701-0225 and using the access code 1720370. The conference call will also be webcast live over the Internet and can be accessed at the Company's website at https://www.everglorygroup.com.


A replay of the call will be available from 11:00 a.m. Eastern Time on May 13 through 11:59 p.m. Eastern Time on May 20 by calling +1-844-512-2921 or +1-412-317-6671 with pin number 1720370.


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", "idole" and "Jizhu".  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)







March 31,
2022




December 31,
2021



ASSETS















CURRENT ASSETS








Cash and cash equivalents



$


41,717




$


56,573



Restricted cash




42,525





40,768



Trading securities




2,965





3,251



Accounts receivable, net




55,025





69,859



Inventories




65,013





63,841



Advances on inventory purchases




5,065





8,179



Value added tax receivable




1,296





1,693



Other receivables and prepaid expenses




6,732





6,345



Amounts due from related parties




1,308





220



Total Current Assets




221,646





250,729












NON-CURRENT ASSETS










Equity security investment




5,229





5,682



Intangible assets, net




4,770





4,794



Property and equipment, net




36,838





36,340



Operating lease right-of-use assets




52,751





50,077



Deferred tax assets




202





899



Other non-current assets




1,575





784



Total Non-Current Assets




101,365





98,576



TOTAL ASSETS



$


323,011




$


349,305












LIABILITIES AND STOCKHOLDERS' EQUITY



















CURRENT LIABILITIES










Bank loans



$


69,300




$


68,992



Accounts payable




50,533





67,930



Accounts payable and other payables – related parties




1,474





1,332



Other payables and accrued liabilities




13,288





18,531



Value added and other taxes payable




-





999



Income tax payable




500





334



Current operating lease liabilities




44,287





41,633



Total Current Liabilities




179,382





199,751












NON-CURRENT LIABILITIES










Deferred tax liabilities




-





-



Non-current operating lease liabilities




8,628





8,596



TOTAL LIABILITIES




188,010





208,347












COMMITMENTS AND CONTINGENCIES (Note 9)



















STOCKHOLDERS' EQUITY










Common stock ($0.001 par value, authorized 50,000,000 shares, 14,814,354 and
    14,812,312 shares issued and outstanding as of March 31, 2022 and December
     31, 2021, respectively)




15





15



Additional paid-in capital




3,665





3,660



Retained earnings




103,121





108,210



Statutory reserve




21,245





21,245



Treasury stock (at cost,162,080 and 147,334 shares at March 31,2022 and
    December 31, 2021, respectively)




(400)





(363)



Accumulated other comprehensive income




7,355





8,191












Total equity




135,001





140,958



TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY



$


323,011




$


349,305



 


 


 


EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES CONDENSED


CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)


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







Three Months Ended





March 31,
2022




March 31,
2021










NET SALES



$


64,773




$


70,814












COST OF SALES




47,401





48,379












GROSS PROFIT




17,372





22,435












OPERATING EXPENSES










Selling expenses




13,686





15,548



General and administrative expenses




6,994





7,851



Total operating expenses




20,680





23,399












LOSS FROM OPERATIONS




(3,308)





(964)












OTHER (EXPENSE) INCOME










Interest income




186





224



Interest expense




(613)





(492)



Government subsidy




3





259



(Loss) gain from changes in fair values of investments




(762)





339



Other income




517





193



Total Other (Expense) Income, Net




(669)





523












LOSS BEFORE INCOME TAX EXPENSE




(3,977)





(441)












INCOME TAX EXPENSE




(1,112)





(729)












NET LOSS



$


(5,089)




$


(1,170)



Foreign currency translation loss




(836)





(1,352)












COMPREHENSIVE LOSS



$


(5,925)




$


(2,522)



LOSS PER SHARE










Basic and diluted



$


(0.34)




$


(0.08)



Weighted average number of shares outstanding Basic and diluted




14,813,787





14,810,001



 


 


 


EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY


FOR THE THREE MONTHS ENDED March 31, 2022 AND 2021 (Unaudited)


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