Ever-Glory Reports First Quarter 2022 Financial Results

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 http://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)
























Total
equity










Common
Stock



Additional






Retained
Earnings



Accumulated
other



Amounts
due from



attributable to
stockholders



Non-







Shares



Amount



paid-in
capital



Treasury
Stock



Unrestricted



Statutory
reserve



Comprehensive
income



related
party



of the
Company



controlling
Interest



Total
equity


Balance at
   January 1, 2022



14,812,312



$

15



$

3,660



$

(363)



$

108,210



$

21,245



$

8,191



$

-



$

140,958



$

-



$

140,958















































Stock issued
   for compensation



2,042




-




5




-




-




-




-




-




5








5


Net  loss



-




-




-




-




(5,089)




-




-




-




(5,089)




-




(5,089)


Repurchase  
   of 14,746 shares
   of common stock



-




-




-




(37)








-




-




-




(37)




-




(37)


Foreign currency
   translation loss



























(836)




-




(836)




-




(836)


Balance at March
   31, 2022



14,814,354



$

15



$

3,665



$

(400)



$

103,121



$

21,245



$

7,355



$

-



$

135,001



$

-



$

135,001
























































Total
equity










Common
Stock



Additional






Retained
Earnings



Accumulated
other



Amounts
due from



attributable to
stockholders



Non-







Shares



Amount



paid-in
capital



Treasury
Stock



Unrestricted



Statutory
reserve



Comprehensive
income



related
party



of the
Company



controlling
Interest



Total
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 income (loss)



-




-




-




-




(1,170)




-




-




-




(1,170)




-




(1,170)


Transfer to reserve



-




-




-




-




-




-




-




-




-








-


Payments received
   from related party
   under counter
   guarantee
   agreement



-




-




-




-




-




-




-




379




379




-




379


Repurchase  of
   147,334 shares
    of common stock



-




-




-




-








-




-




-




-




-




-


Foreign currency
   translation gain



























(1,352)




-




(1,352)




-




(1,352)


Balance at
   December 31,
   2021



14,810,660



$

15



$

3,655



$

-



$

108,001



$

20,376



$

3,238



$

(2,974)



$

132,311



$

-



$

132,311


 

 

 

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)






Three Months Ended




March 31,
2022



March 31,
2021


CASH FLOWS FROM OPERATING ACTIVITIES







Net less


$

(5,089)




(1,170)


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









Depreciation and amortization



2,147




1,377


Loss from sale of property and equipment



52




102


Loss on deconsolidation of a subsidiary



-




-


Provision of (recovering from) bad debt allowance



298




(196)


Provision for obsolete inventories



3,759




3,583


Changes in fair value of trading securities



(283)




(262)


Changes in fair value of investment



479




28


Deferred income tax



701




17


Stock-based compensation



5




5


Changes in operating assets and liabilities









Accounts receivable



14,815




6,509


Inventories



(4,680)




6,805


Value added tax receivable



405




52


Other receivables and prepaid expenses



(278)




(367)


Advances on inventory purchases



3,150




2,544


Amounts due from related parties



(1,089)




(71)


Accounts payable



(16,838)




(14,690)


Accounts payable and other payables- related parties



226




(769)


Other payables and accrued liabilities



(6,252)




(3,221)


Value added and other taxes payable



(1,067)




(220)


Income tax payable



165




(358)


Net cash (used in) operating activities



(9,374)




(302)











CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of property and equipment



(2,507)




(1,378)


Net purchase (proceeds from) of trading securities



569




(983)


Investment payment



(788)




-


Net cash used in investing activities



(2,726)




(2,361)











CASH FLOWS FROM FINANCING ACTIVITIES









Proceeds from bank loans



12,600




12,336


Repayment of bank loans



(12,600)




(6,168)


Repurchase of common stock



(37)




-


Net collection of amounts due from related party (equity)



-




148


Net cash (used in) provided by financing activities



(37)




6,316











EFFECT OF EXCHANGE RATE CHANGES ON CASH



(962)




(1,660)











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



(13,099)




1,993











CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING
   OF PERIOD



97,341




121,723











CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF
   PERIOD


$

84,242



$

123,716











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


















Cash and Cash Equivalents



41,717




78,056


Restricted cash



42,525




45,660




$

84,242



$

123,716











Cash paid during the period for:









Interest


$

613



$

492


Income taxes


$

1,112



$

729


 

View original content:https://www.prnewswire.com/news-releases/ever-glory-reports-first-quarter-2022-financial-results-301546830.html


Source: Ever-Glory International Group, Inc. Related Stocks: NASDAQ:EVK
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