Ever-Glory Reports Third Quarter 2017 Financial Results

NANJING, China, Nov. 13, 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 third quarter ended September 30, 2017.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "Constantly building upon our growing brand recognition and leading supply chain management capabilities, we reported a solid third quarter with both revenue and net income delivering year-over-year growth. In particular, our retail revenue increased by 24.9% compared with the year-ago period as both our in-fashion collections with our upgraded store images and best-in-class customer service continue to receive high marks from our customers. We continued to optimize our store network during the quarter by strengthening our quick response system and better managing our inventory levels.  As of September 30, 2017, we managed a nationwide network of 1,363 stores and launched a new store design for Velwin in July.

"While our wholesale business in the third quarter remained flat compared with the year-ago period, we're pleased to achieve the stabilized results even as overall market conditions in many of our key global markets remained challenging in the quarter," continued Mr. Kang. "Looking ahead, we expect sales in European areas to remain stable while sales in Japan to remain weak. However, we continued our efforts in cost management and managed to improve our gross margin for wholesale business on a year-over-year basis.

"Overall, we are very pleased with our third quarter results. They support our conviction and the priorities we have set for ourselves, as well as the strategies we continue to follow to strengthen the foundations of our business. We believe these goals and objectives will enable us to capture the right opportunities when market conditions improve," concluded Mr. Kang.

Mr. Jason Jiansong Wang, Chief Financial Officer of Ever-Glory, added, "The solid third quarter results, coupled with our ability to increase operating leverage, resulted in expanded overall gross margin and operating income during this quarter. While we continued to improve our wholesale gross margin, third quarter retail gross margin was impacted by higher production costs as we proactively cleared out-of-season inventory. 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."

Third Quarter 2017 Financial Results

Total sales for the third quarter of 2017 were $120.3 million, an increase of 9.4% from $109.9 million in the third quarter of 2016. This increase was primarily attributable to a 0.2% increase in sales in our wholesale business and a 24.9% increase in our retail business.

Sales for the Company's branded fashion apparel retail division increased by 24.9% to $51.3 million for the third quarter of 2017, compared with $41.1 million for the third quarter of 2016. This increase was primarily due to increased same-store sales. The Company had 1,363 retail stores as of September 30, 2017, compared with 1,345 retail stores as of September 30, 2016.

Sales for the Company's wholesale division slightly increased by 0.2% to $69.0 million for the third quarter of 2017, compared with $68.9 million for the third quarter of 2016. This increase was primarily due to an increase in sales in Mainland China and Hong Kong partially offset by a decrease in sales in Germany, the United Kingdom, Europe-Other, Japan and the United States. 

Total gross profit for the third quarter of 2017 increased by 12.3% to $33.3 million, compared with $29.6 million for the third quarter of 2016. Total gross margin increased to 27.6% from 26.9% for the third quarter of 2016.

Gross profit for the retail business increased by 17.8% to $23.0 million for the third quarter of 2017, compared with $19.6 million for the third quarter of 2016. Gross margin decreased to 44.9% from 47.6% for the third quarter of 2016.

Gross profit for the wholesale business increased by 1.6% to $10.2 million for the third quarter of 2017, compared with $10.1 million for the third quarter of 2016. Gross margin increased to 14.8% from 14.6% for the third quarter of 2016.

Selling expenses for the third quarter of 2017 increased by 9.3% to $20.2 million, or 16.8% of total sales, compared with $18.5 million, or 16.8% of total sales for the third quarter of 2016. The increase was mainly attributable to higher retail sales.

General and administrative expenses for the third quarter of 2017 increased by 3.1% to $10.2 million, or 8.5% of total sales, compared with $9.9 million, or 9.0% of total sales for the third quarter of 2016. The increase was attributable to the increased average salaries.

Income from operations for the third quarter of 2017 increased by 131.3% to $2.8 million compared with $1.2 million for the third quarter of 2016.

Net income attributable to the Company for the third quarter of 2017 was $3.2 million compared with a net income attributable to the Company of $0.6 million for the third quarter of 2016. Basic and diluted earnings per share were $0.22 for the third quarter of 2017 compared with basic and diluted earnings per share of $0.04 for the third quarter of 2016.

Balance Sheet

As of September 30, 2017, Ever-Glory had approximately $40.8 million of cash and cash equivalents, compared with approximately $45.3 million as of December 31, 2016. Ever-Glory had working capital of approximately $65.7 million and outstanding bank loans of approximately $44.9 million as of September 30, 2017.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on November 13, 2017 (9:00 p.m. Beijing Time on November 13, 2017). Listeners can access the conference call by dialing +1-888-394-8218 or +1-323-701-0225 and using the access code 4697641. 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 November 13 through 11:59 p.m. Eastern Time on November 20, by dialing +1-844-512-2921 or +1-412-317-6671 and using the access code 4697641.

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: +86-25-5209-6817
E-Mail: sdd@ever-glory.com.cn

The Piacente Group, Inc. 
Emilie Wu
China: +86-10-5730-6200
US: +1-212-481-2050
E-Mail: everglory@tpg-ir.com

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SOURCE Ever-Glory International Group, Inc.