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, | December 31, | |||||||
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 | 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 | - | 8 | - | 2 | |||||||||||
COMPREHENSIVE | $ | 1,663 | $ | (4,055) | $ | (858) | $ | (8,196) | |||||||
LOSS PER SHARE ATTRIBUTABLE TO THE | |||||||||||||||
Basic and diluted | $ | (0.12) | $ | (0.26) | $ | (0.20) | $ | (0.44) | |||||||
Weighted average number of shares outstanding Basic | 14,810,660 | 14,804,832 | 14,810,330 | 14,804,595 | |||||||||||
EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES (In thousands of U.S. Dollars, except share and per share data or otherwise stated) | ||||||||||||||||||||||||||||||||||||||||
Additional | Retained Earnings | Accumulated | Amounts | Total | 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, | 14,809,160 | $ | 15 | $ | 3,650 | $ | 109,171 | $ | 20,376 | $ | 4,590 | $ | (3,353) | $ | 134,449 | - | $ | 134,449 | ||||||||||||||||||||||
Stock issued | 1,500 | - | 5 | - | - | - | - | 5 | 5 | |||||||||||||||||||||||||||||||
Net loss | - | - | - | (1,170) | - | - | - | (1,170) | - | (1,170) | ||||||||||||||||||||||||||||||
Net cash received | - | - | - | - | - | - | 379 | 379 | - | 379 | ||||||||||||||||||||||||||||||
Foreign currency | (1,352) | - | (1,352) | - | (1,352) | |||||||||||||||||||||||||||||||||||
Balance at March 31, | 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 | - | - | - | - | - | - | 386 | 386 | - | 386 | ||||||||||||||||||||||||||||||
Foreign currency | - | - | - | - | - | 3,434 | 3,434 | - | 3,434 | |||||||||||||||||||||||||||||||
Balance at June 30, | 14,810,660 | $ | 15 | $ | 3,655 | $ | 106,230 | $ | 20,376 | $ | 6,672 | $ | (2,588) | $ | 134,360 | - | $ | 134,360 | ||||||||||||||||||||||
Additional | Retained Earnings | Accumulated | Amounts | Total | 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, | 14,801,770 | $ | 15 | $ | 3,640 | $ | 106,328 | $ | 19,939 | $ | (4,330) | $ | (4,932) | $ | 120,660 | (1,510) | $ | 119,150 | ||||||||||||||||||||||
Stock issued | 3,062 | 0.003 | 5 | - | - | - | - | 5 | 5 | |||||||||||||||||||||||||||||||
Net income (loss) | - | - | - | (2,701) | - | - | - | (2,701) | 3 | (2,698) | ||||||||||||||||||||||||||||||
Net cash received | - | - | - | - | - | - | 785 | 785 | - | 785 | ||||||||||||||||||||||||||||||
Foreign currency | (1,440) | - | (1,440) | 3 | (1,437) | |||||||||||||||||||||||||||||||||||
Balance at March 31, | 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 | 151 | 151 | 151 | |||||||||||||||||||||||||||||||||||||
Foreign currency | (261) | (261) | (2) | (263) | ||||||||||||||||||||||||||||||||||||
Balance at June 30, | 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) | ||||||||
Six Months Ended | ||||||||
June 30, | June 30, | |||||||
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 | (15,035) | 26,197 | ||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF | 121,723 | 50,755 | ||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF | $ | 106,688 | $ | 76,952 | ||||
Reconciliation of cash, cash equivalents and restricted cash reported within their | ||||||||
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 | ||||
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SOURCE Ever-Glory International Group, Inc.