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12.05.2017 12:00:00
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Ever-Glory Reports First Quarter 2017 Financial Results
NANJING, China, May 12, 2017 /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 first quarter ended March 31, 2017.
Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "In the first quarter, we continued to execute on the operational adjustments to our retail business in order to enhance efficiencies and increase profitability. Specifically, we accelerated our efforts to balance inventory turnover and sales while propelling our store network optimization by remodeling or relocating 27 stores during the first quarter with the rollout of our new store designs. As of March 31, 2017, we operated a nationwide network of 1,369 stores, and look forward to additional store remodels and relocations in the remaining of this year. In conjunction with our store-remodeling program, we have launched series of branding and promotional activities to synergize our online and offline resources and drive improved interaction between our online operations and offline sales."
"Although the first quarter is a seasonally slow quarter for our wholesale business, we are pleased to report notable gross margin improvement for the first quarter 2017, despite the significant topline pressure from seasonality and the slowdown of economies in our key global markets. Moving forward, we will continue to strengthen our original design manufacturing operations with seasoned expertise in extensive product development and one-stop supply chain management. We aim to further optimize our customer base with a goal of realizing margin expansion and elevated efficiency. Together with sourcing channels and manufacturers with high quality, reliability and cost-efficiency, we are committed to driving our wholesales business towards long-term sustainability," concluded Mr. Kang.
Mr. Jason Jiansong Wang, Chief Financial Officer of Ever-Glory, added, "The challenging consumer market conditions in the past few quarters have not stopped our devotion to maintaining a solid and efficient operation through the implementation of margin enhancement and cost control measures. Our efforts paid off in the first quarter 2017, as we achieved the year-over-year and sequential gross margin improvement of 260 and 40 basis points, respectively, as well as achieving net income of $1.0 million compared with a net loss in the year-ago period. In addition to the gross margin improvement in both retail and wholesales businesses, our retail business with higher gross margin has gained a greater proportion of our total sales in the first quarter, which indicates better operation mix that sets the foundation for sustainable and profitable operation."
First Quarter 2017 Financial Results
Total sales for the first quarter of 2017 were $85.1 million, a decrease of 7.2% from $ 91.7 million in the first quarter of 2016. This decrease was primarily driven by a 13.0% decrease in our wholesale business and a 3.9% decrease in retail business.
Sales for the Company's branded fashion apparel retail division decreased by 3.9% to $56.8 million for the first quarter of 2017, compared with $59.1 million for the first quarter of 2016. This decrease was primarily due to a decrease in same-store sales. The Company had 1,369 retail stores as of March 31, 2017, compared with 1,171 retail stores as of March 31, 2016.
Sales for the Company's wholesale division decreased by 13.0% to $28.3 million for the first quarter of 2017, compared with $32.6 million for the first quarter of 2016. This decrease was primarily due to a decrease in sales in Mainland China, Hong Kong, Japan and United States, partially offset by an increase in sales in Germany, the United Kingdom and other European markets.
Total gross profit for the first quarter of 2017 increased by 0.6% to $28.5 million, compared with $28.3 million for the first quarter of 2016. Total gross margin increased to 33.5% from 30.9% for the first quarter of 2016.
Gross profit for the retail business increased by 0.5% to $22.2 million for the first quarter of 2017, compared with $22.1 million for the first quarter of 2016. Gross margin increased to 39.1% from 37.4% for the first quarter of 2016.
Gross profit for the wholesale business increased by 1.1% to $6.3 million for the first quarter of 2017, compared with $6.2 million for the first quarter of 2016. Gross margin increased to 22.3% from 19.1% for the first quarter of 2016.
Selling expenses for the first quarter of 2017 decreased by 5.6% to $19.7 million, or 23.2% of total sales, compared with $20.9 million, or 22.8% of total sales for the first quarter of 2016. This decrease was mainly attributable to decreased store decoration and marketing expenses.
General and administrative expenses for the first quarter of 2017 increased by 4.4% to $7.3 million, or 8.5% of total sales, compared with $6.9 million, or 7.6% of total sales for the first quarter of 2016. The increase was attributable to the increased average salaries.
Income from operations for the first quarter of 2017 increased by 213.7% to $1.5 million compared with $0.5 million for the first quarter of 2016.
Net income (loss) attributable to the Company for the first quarter of 2017 was $1.0 million compared with a net loss of $0.4 million for the first quarter of 2016. Basic and diluted earnings per share were $0.07 for the first quarter of 2017 compared with basic and diluted loss per share of $0.02 for the first quarter of 2016.
Balance Sheet
As of March 31, 2017, Ever-Glory had approximately $60.1 million of cash and cash equivalents, compared with approximately $45.3 million as of December 31, 2016. Ever-Glory had working capital of approximately $57.9 million as of March 31, 2017, and outstanding bank loans of approximately $32.2 million as of March 31, 2017.
Conference Call
The Company will hold a conference call at 8:00 a.m. Eastern Time on May 12, 2017 (8:00 p.m. Beijing Time on May 12, 2017). Listeners can access the conference call by dialing +1-877-719-9799 or +1-719-325-4863 and using the access code 6268735. 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 May 12 through 11:59 p.m. Eastern Time on May 19, by dialing +1-844-512-2921 or +1-412-317-6671 and using the access code 6268735.
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: +86-25-5209-6875
E-Mail: xxnfff@126.com
The Piacente Group, Inc.
Emilie Wu
China: +86-10-5730-6200
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 MARCH 31, 2017 (UNAUDITED) AND DECEMBER 31, 2016 | ||||||||
2017 | 2016 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 60,100 | $ | 45,288 | ||||
Accounts receivable | 44,631 | 67,644 | ||||||
Inventories | 40,347 | 49,630 | ||||||
Value added tax receivable | 1,726 | 2,938 | ||||||
Other receivables and prepaid expenses | 4,158 | 3,674 | ||||||
Advances on inventory purchases | 4,892 | 3,139 | ||||||
Amounts due from related parties | 563 | 486 | ||||||
Total Current Assets | 156,417 | 172,799 | ||||||
INTANGIBLE ASSETS | 5,776 | 5,769 | ||||||
PROPERTY AND EQUIPMENT, NET | 21,947 | 22,694 | ||||||
TOTAL ASSETS | $ | 184,140 | $ | 201,262 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Bank loans | $ | 32,212 | $ | 29,232 | ||||
Accounts payable | 46,843 | 58,170 | ||||||
Accounts payable and other payables - related parties | 2,541 | 4,337 | ||||||
Other payables and accrued liabilities | 13,329 | 15,007 | ||||||
Value added and other taxes payable | 2,450 | 5,118 | ||||||
Income tax payable | 1,096 | 1,842 | ||||||
Total Current Liabilities | 98,471 | 113,706 | ||||||
NONCURRENT LIABILITIES | ||||||||
Deferred tax liabilities | 2,100 | 3,254 | ||||||
TOTAL LIABILITIES | 100,571 | 116,960 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Stockholders' equity: | ||||||||
Preferred stock ($.001 par value, authorized 5,000,000 shares, no shares issued | - | - | ||||||
Common stock ($.001 par value, authorized 50,000,000 shares, 14,792,836 and | 15 | 15 | ||||||
Additional paid-in capital | 3,612 | 3,602 | ||||||
Retained earnings | 84,398 | 83,423 | ||||||
Statutory reserve | 17,107 | 17,107 | ||||||
Accumulated other comprehensive income | (2,837) | (3,297) | ||||||
Amounts due from related party | (17,934) | (15,936) | ||||||
Total equity attributable to stockholders of the Company | 84,361 | 84,914 | ||||||
Noncontrolling interest | (792) | (612) | ||||||
Total Equity | 83,569 | 84,302 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 184,140 | $ | 201,262 | ||||
EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ||||||||
(In thousands of U.S. Dollars, except share and per share data or otherwise stated) | ||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016 (UNAUDITED) | ||||||||
2017 | 2016 | |||||||
SALES | $ | 85,120 | $ | 91,693 | ||||
COST OF SALES | 56,611 | 63,350 | ||||||
GROSS PROFIT | 28,509 | 28,343 | ||||||
OPERATING EXPENSES | ||||||||
Selling expenses | 19,745 | 20,913 | ||||||
General and administrative expenses | 7,255 | 6,949 | ||||||
Total operating expenses | 27,000 | 27,862 | ||||||
INCOME FROM OPERATIONS | 1,509 | 481 | ||||||
OTHER INCOME (EXPENSE) | ||||||||
Interest income | 257 | 384 | ||||||
Interest expense | (327) | (597) | ||||||
Other income | 577 | 67 | ||||||
Total other expenses | 507 | (146) | ||||||
INCOME BEFORE INCOME TAX EXPENSE | 2,016 | 335 | ||||||
INCOME TAX EXPENSE | (1,217) | (835) | ||||||
NET (LOSS) INCOME | 799 | (500) | ||||||
Net loss attributable to the non-controlling interest | 175 | 140 | ||||||
NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY | $ | 974 | $ | (360) | ||||
NET (LOSS) INCOME | $ | 799 | $ | (500) | ||||
Foreign currency translation income | 459 | 782 | ||||||
COMPREHENSIVE INCOME | $ | 1,258 | $ | 282 | ||||
Comprehensive loss attributable to the noncontrolling interest | 180 | 143 | ||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY | $ | 1,438 | $ | 425 | ||||
(LOSS) EARNINGS PER SHARE: | ||||||||
Basic and diluted | $ | 0.07 | $ | (0.02) | ||||
Weighted average number of shares outstanding Basic and diluted | 14,789,626 | 14,785,868 | ||||||
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 THREE MONTHS ENDED MARCH 31, 2017 AND 2016 (UNAUDITED) | ||||||||
2017 | 2016 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net (loss) income | $ | 799 | $ | (500) | ||||
Adjustments to reconcile net (loss) income to cash provided by operating | ||||||||
Depreciation and amortization | 2,241 | 1,758 | ||||||
Provision for obsolete inventories | - | 2,098 | ||||||
Deferred income tax | (1,180) | (285) | ||||||
Stock-based compensation | 10 | - | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | 23,487 | 30,037 | ||||||
Inventories | 9,646 | 7,443 | ||||||
Value added tax receivable | 1,236 | 799 | ||||||
Other receivables and prepaid expenses | (543) | (3,163) | ||||||
Advances on inventory purchases | (1,730) | 2,196 | ||||||
Amounts due from related parties | (495) | 552 | ||||||
Accounts payable | (11,762) | (19,781) | ||||||
Accounts payable and other payables- related parties | (1,527) | (517) | ||||||
Other payables and accrued liabilities | (1,794) | (2,484) | ||||||
Value added and other taxes payable | (2,713) | (1,653) | ||||||
Income tax payable | (755) | (1,693) | ||||||
Net cash provided by operating activities | 14,920 | 14,807 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchases of property and equipment | (1,209) | (1,633) | ||||||
Proceeds from sale of property and equipment | 5 | - | ||||||
Net cash used in investing activities | (1,204) | (1,633) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds from bank loans | 15,671 | 23,593 | ||||||
Repayment of bank loans | (12,913) | (26,250) | ||||||
Repayment of loans from related party | - | 917 | ||||||
Advances to related party | (1,742) | - | ||||||
Net cash used in financing activities | 1,016 | (1,740) | ||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 80 | 503 | ||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 14,812 | 11,937 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 45,288 | 22,702 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 60,100 | $ | 34,639 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 327 | $ | 597 | ||||
Income taxes | $ | 1,853 | $ | 2,851 | ||||
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ever-glory-reports-first-quarter-2017-financial-results-300456717.html
SOURCE Ever-Glory International Group, Inc.
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