Ever-Glory Reports First Quarter 2016 Financial Results
By PRN NewsWire
By PRN NewsWire
NANJING, China, May 13, 2016 /PRNewswire/ — Ever-Glory International Group, Inc. (the “Company” or “Ever-Glory”) (NASDAQ-GM: 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, 2016.
Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, “Our first quarter results reflect the continued challenging retail environment in China. Despite soft domestic consumption and lower-than-expected retail sales in the first quarter, we unveiled a new store design for our first brand, La go go. With a stylish, simple layout and new product displays, we aim to provide a fresh shopping experience for customers while improving same-store sales. Moreover, our new brands Sea To Sky, Velwin and idole continue to be well received by our consumers.”
“First quarter wholesale sales remained at a stable level compared with the same period of prior year, benefiting from our strong supply chain management and product development capabilities. While our outlook for the apparel industry this year remains conservative due to the weak retail environment, we are confident about our long-term strategy to build a profitable and sustainable business,” concluded Mr. Kang.
Mr. Jason Jiansong Wang, Chief Financial Officer of Ever-Glory, added, “As we advance our strategic initiatives to optimize the retail store network and tailor the management teams for each brand, our operating expenses increased during the first quarter. As a disciplined accounting measure, we also increased the provision on inventory of out-of-season products, which negatively impacted our bottom line. However, with a healthy balance sheet and strong cash position, we remain optimistic about the growth opportunities in our overall business. We believe our combined efforts will enhance our competitive position and enable growth and profitability as business conditions improve.”
First Quarter 2016 Financial Results
Total sales for the first quarter of 2016 were $91.7 million, a decrease of 6.3% from $97.9 million in the first quarter of 2015. This decrease was primarily attributable to an 8.5% decrease in sales in our retail business and a 2.2% decrease in our wholesale business.
Retail sales for the Company’s branded fashion apparel retail division decreased by 8.5% to $59.1 million for the first quarter of 2016, compared with $64.6 million for the first quarter of 2015. This decrease was primarily due to the decrease in same-store sales. The Company had 1,171 retail stores as of March 31, 2016, compared with 1,206 retail stores as of March 31, 2015.
Sales for the Company’s wholesale division decreased by 2.2% to $32.6 million for the first quarter of 2016, compared with $33.3 million for the first quarter of 2015. This decrease was primarily due to decreased sales in China, Germany and the United Kingdom, partially offset by increased sales in other European markets, Japan and the United States.
Total gross profit for the first quarter of 2016 decreased by 7.4% to $28.3 million, compared with $30.6 million for the first quarter of 2015. Total gross margin decreased by 40 basis points to 30.9% from 31.3% for the first quarter of 2015.
Gross profit for the retail business decreased by 5.7% to $22.1 million for the first quarter of 2016, compared with $23.5 million for the first quarter of 2015. Gross margin increased by 110 basis points to 37.4% from 36.3% for the first quarter of 2015.
Gross profitfor the wholesale business decreased by 12.8% to $6.2 million for the first quarter of 2016, compared with $7.2 million for the first quarter of 2015. Gross margin decreased by 240 basis points to 19.1% from 21.5% for the first quarter of 2015.
Selling expenses for the first quarter of 2016 increased by 3.2% to $20.9 million, or 22.8% of total sales, compared with $20.3 million, or 20.7% of total sales for the first quarter of 2015. The increase was mainly attributable to increased average salaries as well as increased store decoration and marketing expenses associated with the promotion of our retail brands.
General and administrative expenses for the first quarter of 2016 increased slightly to $6.9 million, or 7.6% of total sales, compared with $6.9 million, or 7.1% of total sales for the first quarter of 2015.
Income from operations for the first quarter of 2016 decreased by 86.0% to $0.5 million compared with $3.4 million for the first quarter of 2015.
Net loss attributable to the Company for the first quarter of 2016 was $0.4 million compared with net income attributable to the Company of $2.4 million for the first quarter of 2015. Basic and diluted loss per share was $0.02 for the first quarter of 2016 compared with basic and diluted earnings per share of $0.16 for the first quarter of 2015.
As of March 31, 2016, Ever-Glory had approximately $34.6 million of cash and cash equivalents, compared with approximately $22.7 million as of December 31, 2015. Ever-Glory had working capital of approximately $54.2 million as of March 31, 2016, and outstanding bank loans of approximately $42.4 million as of March 31, 2016.
The Company will hold a conference call at 8:00 a.m. Eastern Time on May 13, 2016 (8:00 p.m. Beijing Time on May 13, 2016). Listeners can access the conference call by dialing +1-888-539-3696 or +1-719-325-2244 and using the access code 9325642. 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 13 through 11:59 p.m. Eastern Time on May 20, by dialing +1-877-870-5176 or +1-858-384-5517 and using the access code 9325642.
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 under its own brands “La go go”, “Velwin”, “Sea To Sky” and “idole” in China. 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 services of supply chain management on fabric development and design, sampling, sourcing, quality control, manufacturing, logistics, customs clearance and distribution.
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: +86-25-52096875 E-Mail: firstname.lastname@example.org
The Piacente Group, Inc. Emilie Wu China: +86-10-6535-0148 US: +1-212-481-2050 E-Mail: email@example.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, 2016 (UNAUDITED) AND DECEMBER 31, 2015 2016 2015 —- —- ASSETS CURRENT ASSETS Cash and cash equivalents $34,639 $22,702 Accounts receivable 57,612 87,527 Inventories 65,838 75,063 Value added tax receivable 1,944 2,736 Other receivables and prepaid expenses 7,072 3,840 Advances on inventory purchases 4,007 6,193 Amounts due from related parties 1,925 2,535 —– —– Total Current Assets 173,037 200,596 ——- ——- INTANGIBLE ASSETS 6,220 6,217 PROPERTY AND EQUIPMENT, NET 21,953 21,906 —— —— TOTAL ASSETS $201,210 $228,719 ======== ======== LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Bank loans $42,414 $44,841 Accounts payable 46,629 66,118 Accounts payable and other payables – related parties 2,314 2,823 Other payables and accrued liabilities 19,855 22,221 Value added and other taxes payable 5,250 6,882 Income tax payable 2,362 4,052 —– —– Total Current Liabilities 118,824 146,937 ——- ——- NONCURRENT LIABILITIES Deferred tax liabilities 2,722 2,992 —– —– TOTAL LIABILITIES 121,546 149,929 ——- ——- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS’ EQUITY Stockholders’ equity: Preferred stock ($.001 par value, authorized 5,000,000 shares, no shares – – issued and outstanding) Common stock ($.001 par value, authorized 50,000,000 shares, 14,785,868 15 15 and 14,785,868 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively) Additional paid-in capital 3,597 3,597 Retained earnings 78,078 78,439 Statutory reserve 15,327 15,327 Accumulated other comprehensive income 4,029 3,249 Amounts due from related party (21,182) (21,776) ——- ——- Total equity attributable to stockholders of the Company 79,864 78,851 —— —— Noncontrolling interest (200) (61) —- — Total Equity 79,664 78,790 —— —— TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $201,210 $228,719 ======== ========
EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (LOSS) 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, 2016 AND 2015 (UNAUDITED) 2016 2015 —- —- SALES $91,693 $97,903 COST OF SALES 63,350 67,295 —— —— GROSS PROFIT 28,343 30,608 —— —— OPERATING EXPENSES Selling expenses 20,913 20,255 General and administrative expenses 6,949 6,914 —– —– Total operating expenses 27,862 27,169 —— —— INCOME FROM OPERATIONS 481 3,439 — —– OTHER INCOME (EXPENSE) Interest income 384 324 Interest expense (597) (776) Other income 67 234 — — Total other expenses (146) (218) —- —- INCOME BEFORE INCOME TAX EXPENSE 335 3,221 INCOME TAX EXPENSE (835) (825) —- —- NET (LOSS) INCOME (500) 2,396 Net loss attributable to the non-controlling interest 140 – — — NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY $(360) $2,396 ===== ====== NET (LOSS) INCOME $(500) $2,396 Foreign currency translation income 782 456 — — COMPREHENSIVE INCOME $282 $2,851 Comprehensive loss attributable to the noncontrolling interest 143 – — — COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY $425 $2,851 ==== ====== (LOSS) EARNINGS PER SHARE: Basic and diluted $(0.02) $0.16 ====== ===== Weighted average number of shares outstanding Basic and diluted 14,786 14,784 ====== ======
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, 2016 AND 2015 (UNAUDITED) 2016 2015 —- —- CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income $(500) $2,396 Adjustments to reconcile net (loss) income to cash provided by operating activities: Depreciation and amortization 1,758 2,510 Provision for obsolete inventories 2,098 – Deferred income tax (285) (128) Changes in operating assets and liabilities Accounts receivable 30,037 23,930 Inventories 7,443 9,214 Value added tax receivable 799 277 Other receivables and prepaid expenses (3,163) 1,153 Advances on inventory purchases 2,196 (2,716) Amounts due from related parties 552 (3,277) Accounts payable (19,781) (10,733) Accounts payable and other payables- related parties (517) (2,341) Other payables and accrued liabilities (2,484) (2,375) Value added and other taxes payable (1,653) 1,766 Income tax payable (1,693) (1,278) —— —— Net cash provided by operating activities 14,807 18,397 —— —— CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (1,633) (4,410) Proceeds from sale of property and equipment – 3 — — Net cash used in investing activities (1,633) (4,407) —— —— CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from bank loans 23,593 28,350 Repayment of bank loans (26,250) (43,051) Repayment of loans from related party 917 – Advances to related party – (813) — —- Net cash used in financing activities (1,740) (15,513) —— ——- EFFECT OF EXCHANGE RATE CHANGES ON CASH 503 (631) NET INCREASE (DECREASE) IN CASH AND CASH 11,937 (2,154) EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 22,702 34,134 —— —— CASH AND CASH EQUIVALENTS AT END OF PERIOD $34,639 $31,980 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $597 $776 ==== ==== Income taxes $2,851 $2,231 ====== ======
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Ever-Glory International Group, Inc.
Web site: http://www.everglorygroup.com/