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Ever-Glory Fourth Quarter 2021 Financial Results

2022-04-13 17:56

NEW YORK, April 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 full year ended December 31, 2021.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "During the full year of 2021, 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 full year 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 137 stores during 2021, we operated a nationwide network of 880 stores as of December 31, 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 full year 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."

Full year 2021 Financial Results 

Total sales for the full year of 2021 were $331.0 million, an increase of 23.8% from $267.4 million in the full year of 2020. This increase was primarily driven by a 57.8% increase in our wholesale business partially offset by a 2.7% decrease in retail business.

Sales for the Company's branded fashion apparel retail division decreased by 2.7% to $146.1 million for the full year of 2021, compared with $150.1 million for the full year of 2020. This decrease was primarily due to a decrease in same store sales. The Company operated 880 retail stores as of December 31, 2021, compared with 936 retail stores as of December 31, 2020.

Sales for the Company's wholesale division increased by 57.8% to $184.9 million for the full year of 2021, compared with $117.2 million for the full year of 2020. This increase was primarily attributable to increased sales in Mainland China, Hong Kong China, Europe-Other, Japan and United States. 

Total gross profit for the full year of 2021 increase by 10.7% to $101.0 million, compared with $91.2 million for tthe full year of 2020. Total gross margin for the full year of 2021 decreased to 30.5% from 34.1% for the full year of 2020.

Gross profit for the retail business increase by 3.6% to $63.7 million for the full year of 2021, compared with $61.5 million for the full year of 2020. Gross margin for the full year of 2021 was 43.6% compared to 40.9% for the full year of 2020.

Gross profit for the wholesale business increased by 25.4% to $37.3 million for the full year of 2021, compared with $29.7 million for the full year of 2020. Gross margin for the full year of 2021 decreased to 20.2% from 25.4% for the full year of 2020.

Selling expenses for the full year of 2021 increased by 12.8% to $63.1 million, or 19.1% of total sales, compared with $55.9 million, or 20.9% of total sales for the full year of 2020. The increase was attributable to the higher travelling expenses.

General and administrative expenses for the full year of 2021 increased by 23.2% to $38.4 million, or 11.6% of total sales, compared with $31.2 million, or 11.7% of total sales for the full year of 2020. The increase was attributable to the increased salaries.

(Loss) Income from operations was ($0.5 million) for the full year of 2021, compared to $4.1 million for the full year of 2020.

Net loss attributable to the Company for the full year of 2021 was ($0.09 million )compared with 3.3 million for the full year of 2020. Basic and diluted loss per share were ($0.01) for the full year of 2021 compared with $0.22 for the full year of 2020.

Balance Sheet 

As of December 31, 2021, Ever-Glory had approximately $56.6 million of cash and cash equivalents, compared with approximately $81.9 million as of December 31, 2020. Ever-Glory had working capital of approximately $51.0 million as of December 31, 2021, and outstanding bank loans of approximately $69.0 million as of December 31, 2021.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on April 13, 2022(8:00 p.m. Beijing Time on April 13, 2022). Listeners can access the conference call by dialing +1-800-239-9838 or +1-323-794-2551 and using the access code 1990321. 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 April 13 through 11:59 p.m. Eastern Time on April 20 by calling +1-844-512-2921 or +1-412-317-6671 with pin number 1990321.

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.

For investor and media inquiries, please contact:

Ever-Glory International Group
Huilin Hua
Tel: +86-25-52096859
E-Mail: huahuilin@ever-glory.com.cn

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 DECEMBER 31, 2021 AND 2020






December 31,
2021



December 31,
2020


ASSETS














CURRENT ASSETS







     Cash and cash equivalents


$

56,573



$

81,865


     Restricted cash



40,768




39,858


     Trading securities



3,251




1,792


     Accounts receivable, net



69,859




53,285


     Inventories



63,841




53,893


     Advances on inventory purchases



8,179




10,261


     Value added tax receivable



1,693




1,244


     Other receivables and prepaid expenses



6,345




5,479


     Amounts due from related parties



220




567


Total Current Assets



250,729




248,244











NON-CURRENT ASSETS









     Equity security investment



5,682




3,932


     Intangible assets, net



4,794




4,794


     Property and equipment, net



36,340




32,164


     Operating lease right-of-use assets



50,077




41,690


     Deferred tax assets



899




902


     Other non-current assets



784




-


Total Non-Current Assets



98,576




83,482


TOTAL ASSETS


$

349,305



$

331,726











LIABILITIES AND STOCKHOLDERS' EQUITY


















CURRENT LIABILITIES









     Bank loans


$

68,992



$

65,919


     Accounts payable



67,930




67,762


     Accounts payable and other payables – related parties



1,332




3,764


     Other payables and accrued liabilities



18,531




16,073


     Value added and other taxes payable



999




909


     Income tax payable



334




1,062


     Current operating lease liabilities



41,633




33,481


Total Current Liabilities



199,751




188,970











NON-CURRENT LIABILITIES









Non-current operating lease liabilities



8,596




8,307


TOTAL LIABILITIES



208,347




197,277











COMMITMENTS AND CONTINGENCIES (Note 9)


















STOCKHOLDERS' EQUITY









     Common stock ($0.001 par value, authorized 50,000,000 shares, 14,812,312 and
         14,809,160 shares issued and outstanding as of December 30, 2021 and
         December 31, 2020, respectively)



15




15


     Additional paid-in capital



3,660




3,650


     Retained earnings



108,210




109,171


     Statutory reserve



21,245




20,376


     Treasury stock (as cost,147,334 shares at December 30, 2021)



(363)




-


     Accumulated other comprehensive income



8,191




4,590


     Amounts due from related party







(3,353)


Total equity



140,958




134,449


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

349,305



$

331,726


 

 

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 YEARS ENDED DECEMBER 31, 2021 AND 2020 






2021



2020









NET SALES


$

330,978



$

267,354











COST OF SALES



230,026




176,141











GROSS PROFIT



100,952




91,213











OPERATING EXPENSES









  Selling expenses



63,074




55,894


  General and administrative expenses



38,416




31,176


Total operating expenses



101,490




87,070











(LOSS) INCOME FROM OPERATIONS



(538)




4,143











OTHER INCOME (EXPENSE)









  Interest income



976




1,014


  Interest expense



(2,391)




(2,345)


  Government subsidy



1,163




1,235


  Gain (loss) from changes in fair values of investments



1,791




(135)


  Other income



1,852




1,830


Total Other Income, Net



3,391




1,599











INCOME BEFORE INCOME TAX EXPENSE



2,853




5,742











INCOME TAX EXPENSE



(2,945)




(2,469)











(LOSS)NET  INCOME



(92)




3,273











Net loss attributable to the non-controlling interest



-




7


NET INCOME ATTRIBUTABLE TO THE COMPANY


$

(92)



$

3,280











(LOSS)NET INCOME


$

(92)



$

3,273


  Foreign currency translation gain



3,601




8,920


COMPREHENSIVE INCOME


$

3,509



$

12,193











Comprehensive  income attributable to the noncontrolling interest



-




7











COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY


$

3,509



$

12,200


(LOSS)EARNINGS PER SHARE ATTRIBUTABLE TO THE COMPANY'S
STOCKHOLDERS:









  Basic and diluted


$

(0.01)



$

0.22


Weighted average number of shares outstanding Basic and diluted



14,811,020




14,806,778












 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

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

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 










Additional







Retained Earnings



Accumulated
other



Amounts
due
from



Total
equity
attributable
to stockholders



Non-








Common Stock



paid-in




Treasury
Stock 






Statutory



Comprehensive



related



of the



controlling



Total





Shares



Amount



capital








Unrestricted



reserve



income



party



Company



Interest



equity



Balance at
   January 1,
   20
20



14,801,770



$

15



$

3,640




$

-



$

106,328



$

19,939



$

(4,330)



$

(4,932)



$

120,660



$

(1,510)



$

119,150


















































Stock issued for
   compensation



7,390




-




10





-




-




-




-




-




10








10



Net income
   (loss)



-




-




-





-




3,280




-




-




-




3,280




(7)




3,273



Transfer to
   reserve



-




-




-





-




(437)




437




-




-




-








-



Net cash paid to
   related party
   under counter
   guarantee
   agreement
   (Note 11)



-




-




-





-




-




-




-




1,579




1,579




-




1,579


















































Deconsolidation
   of Yiduo



-




-




-





-




-




-




-




-




-




1,517




1,517



Foreign
   currency
   translation
   gain




























8,920








8,920




-




8,920



Balance at
   December
   31, 2020



14,809,160



$

15



$

3,650




$

-



$

109,171



$

20,376



$

4,590



$

(3,353)



$

134,449



$

-



$

134,449


















































Stock issued for
   compensation



3,152




-




10





-




-




-




-




-




10








10



Net income
   (loss)



-




-




-





-




(92)




-




-




-




(92)




-




(92)



Transfer to
   reserve



-




-




-





-




(869)




869




-




-




-








-



Payments
   received
   from
party
   under counter
   guarantee
   agreement
   (Note 11)



-




-




-





-




-




-




-




3,353




3,353




-




3,353



Repurchase of
   147,334
   shares of
   common
   stock



-




-




-





(363)








-




-




-




(363)




-




(363)



Foreign
   currency
   translation
   gain




























3,601




-




3,601




-




3,601



Balance at
   December
   31, 202
1



14,812,312



$

15



$

3,660




$

(363)



$

108,210



$

21,245



$

8,191



$

-



$

140,958



$

-



$

140,958



 

 

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 YEARS ENDED DECEMBER 31, 2021AND 2020








2021



2020



CASH FLOWS FROM OPERATING ACTIVITIES








  Net income


$

(92)




3,273



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










  Depreciation and amortization



6,404




5,291



  Loss from sale of property and equipment



610




209



  Loss on deconsolidation of a subsidiary



-




1,085



  Provision of bad debt allowance



1,429




1,117



  Provision for obsolete inventories



6,735




6,753



  Changes in fair value of trading securities



(150)




(131)



  Changes in fair value of investment



(1,641)




(819)



  Deferred income tax



24




154)



  Stock-based compensation



10




10



  Changes in operating assets and liabilities










Accounts receivable



(16,737)




27,173



Inventories



(15,483)




10,161



Value added tax receivable



(416)




1,336



Other receivables and prepaid expenses



(710)




(135)



Advances on inventory purchases



2,418




(28)



Amounts due from related parties



3,563




(480)



Accounts payable



(2,238)




(9,316)



Accounts payable and other payables- related parties



(3,142)




(1,145)



Other payables and accrued liabilities



3,083




(3,098)



Value added and other taxes payable



71




(806)



Income tax payable



(747)




(148)



       Net cash (used in) provided by operating activities



(17,009)




40,456













CASH FLOWS FROM INVESTING ACTIVITIES










  Purchases of property and equipment



(10,123)




(6,354)



  Net purchase of trading securities



(1,309)




(1,665)



Investment payment



(775)




(2,936)



       Net cash used in investing activities



(12,207)




(10,955)













CASH FLOWS FROM FINANCING ACTIVITIES










  Proceeds from bank loans



73,340




90,729



  Repayment of bank loans



(71,790)




(58,658)



  Repurchase of common stock



363




-



  Net collection of amounts due from related party (equity)



863




1,848



       Net cash provided by financing activities



2,776




33,919













EFFECT OF EXCHANGE RATE CHANGES ON CASH



2,058




7,548













NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH



(24,382)




70,968













CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF
PERIOD



121,723




50,755













CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD


$

97,341



$

121,723













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










Cash and Cash Equivalents



56,573




81,865



Restricted cash



40,768




39,858





$

97,341



$

121,723













SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:










Net asset (liabilities) derecognized due to deconsolidation of a subsidiary



-



$

1,164



Cash paid during the period for:










Interest


$

2,391



$

2,345



Income taxes


$

2,945



$

2,469



 

Cision View original content:https://www.prnewswire.com/news-releases/ever-glory-fourth-quarter-2021-financial-results-301524707.html

Source: Ever-Glory International Group, Inc.

Related stocks: NASDAQ:EVK

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