Ever-Glory International Group, Inc. - FORM 8-K - EX-99.1 - November 15, 2013

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8-K - CURRENT REPORT - Ever-Glory International Group, Inc.f8k111311_everglory.htm
Exhibit 99.1
 
Ever-Glory Reports Third Quarter 2013 Financial Results
 

 
NANJING, China, Nov. 13, 2013 /PRNewswire/ -- Ever-Glory International Group, Inc. (Ever-Glory) (NYSE MKT: EVK), a leading apparel supply chain manager and retailer based in China, today reported its financial results for the third quarter ended September 30, 2013.
 
Total sales for the quarter were $106.7 million, an increase of 54% compared to $69.3 million in the third quarter of last year. This increase was primarily attributable to increased sales in Ever-Glory's retail business as well as wholesale business.
 
Retail sales for the quarter from LA GO GO, Ever-Glory's branded retail division, increased 74.4% to $42.5 million, compared to $24.4 million for the same period last year. This increase was primarily due to the increase in new stores opened and increase in same store sales. Ever-Glory had 904 LA GO GO stores as of September 30, 2013, compared to 644 LA GO GO stores as of September 30, 2012.
 
Wholesale sales generated from Ever-Glory's wholesale business for the quarter increased 42.9% to $64.2 million, compared to $44.9 million for the same period last year. This increase was primarily attributable to increased sales in the United Kingdom, United States, Europe-Other and the People's Republic of China.
 
Total gross profit for the quarter was $25.4 million, or 23.8% of total sales, compared to $15.3 million, or 22.1% of total sales for the same period last year.
 
Selling expenses for the quarter increased 65.5% to $14.2 million compared to $8.6 million for the same period last year. As a percentage of sales, selling expenses increased to 13.3% compared to 12.4% for the same period last year. The increase was attributable to the increased number of retail employees and increased average salaries, as well as increased store decoration and marketing expenses associated with the promotion of the LA GO GO brand.
 
General and administrative expenses for the quarter increased 61.0% to $6.7 million compared to $4.2 million for the same period last year. As a percentage of sales, general and administrative expenses increased to 6.3% compared to 6.0% for the same period last year. The increase was attributable to an increase in the number of wholesale and retail management personnel.
 
Income from operations for the quarter increased 74.1% to $4.5 million compared to $2.6 million for the same period last year. As a percentage of sales, income from operations accounted for 4.2% of Ever-Glory's total sales for the quarter, an increase of 0.5% compared to 3.7% last year.
 
For the third quarter, net income was $3.9 million, or $0.26 per diluted share, an increase of 70.8% from $2.3 million, or $0.15 per diluted share in the third quarter of 2012. Net income in the third quarter of 2012 includes approximately $0.1 million of non-cash income related to the change in fair value of a derivative liability. There was no such liability in the third quarter of 2013.
 
Balance Sheet and Cash Flow
 
As of September 30, 2013, Ever-Glory had approximately $11.7 million of cash and cash equivalents, compared to approximately $9.4 million as of December 31, 2012. Ever-Glory had working capital of approximately $30.3 million as of September 30, 2013, and outstanding bank loans of approximately $48.3 million as of September 30, 2013.
 
 
 
 
 
Business Outlook
 
For the fourth quarter of 2013, Every-Glory anticipates total net sales in the range of $80 to $100 million and net income in the range of $2.5 to $3.5 million. For full year 2013, Every-Glory anticipates total net sales in the range of $300 to $360 million and net income in the range of $11 to $17 million. The full year revenue forecast is comprised of $150 to $180 million in anticipated wholesale revenue and $150 to $180 million in anticipated revenue from retail operations.
 
About Ever-Glory International Group, Inc.
 
Based in Nanjing, China, Ever-Glory International Group, Inc. is a leading apparel supply chain manager and retailer in China. Ever-Glory is the first Chinese apparel Company listed on the American Stock Exchange (now called NYSE MKT), and has a focus on middle-to-high grade casual wear, outerwear, and sportswear brands. Ever-Glory maintains global strategic partnerships in Europe, the United States, Japan and China, conducting business with several well-known brands and retail chain stores. In addition, Ever-Glory operates its own domestic chain of retail stores known as "LA GO GO."
 
Conference Call
 
Ever-Glory will hold a conference call today at 8:00 a.m. Eastern Time which will be hosted by Jason Jiansong Wang, Chief Financial Officer. Listeners can access the conference call by dialing # 1-913-312-0724 and referring to the confirmation code 9256765. The conference call will also be broadcast live over the Internet and can be accessed at the Company's web site at the following URL: http://www.everglorygroup.com.
 
A replay of the call will be available from 11:00 a.m. November 13, 2013 through November 20, 2013 Eastern Time by calling # 1-858-384-5517; pin number: 9256765.
 
Cautionary Note Regarding 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 other 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.
 
 
 
 
 
EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012 (UNAUDITED)
 
       
  
Three months ended
    
Nine months ended
  
       
  
September30,
    
September30,
  
       
  
2013
    
2012
    
2013
    
2012
  
       
        
 
   
 
       
NET SALES
  
$
106,659,519
    
$
69,269,905
    
$
244,100,494
    
$
169,691,109
  
       
  
　
            
　
          
COST OF SALES
    
81,254,688
      
  53,941,736
      
  178,924,172
      
129,173,371
  
       
                  
　
          
GROSS PROFIT
    
25,404,831
      
  15,328,169
      
  65,176,322
      
40,517,738
  
       
                                
OPERATING EXPENSES
                                
Selling expenses  
    
14,249,753
      
  8,608,695
      
  35,999,155
      
21,409,222
  
General and administrative expenses  
    
6,684,580
      
  4,152,162
      
  16,670,132
      
11,355,568
  
Total Operating Expenses
    
20,934,333
      
  12,760,857
      
  52,669,287
      
32,764,790
  
       
                                
INCOME FROM OPERATIONS
    
4,470,498
      
  2,567,312
      
  12,507,035
      
7,752,948
  
       
                                
OTHER (EXPENSES) INCOME
                                
Interest income  
    
272,321
      
  360,001
      
  910,111
      
970,221
  
Interest expense  
    
(757,390
)
    
  (449,413
)
    
  (2,285,614
)  
    
(1,454,157
)
Change in fair value of derivative liability  
    
-
      
  91,000
      
  294,000
      
381,800
  
Other (expenses) income  
    
831,952
      
  (130,359
) 
    
  684,311
      
105,954
  
Total Other (Expenses) Income
    
346,883
      
  (128,771
)
    
(397,192
) 
   
3,818
  
       
                                
INCOME BEFORE INCOME TAX EXPENSE
    
4,817,381
      
  2,438,541
      
  12,109,843
      
7,756,766
  
       
                                
INCOME TAX EXPENSE
    
(933,933
)
    
  (164,609
)
    
  (2,412,105
)  
    
(1,010,475
)
       
                                
NET INCOME
    
3,883,448
      
  2,273,932
      
  9,697,738
      
6,746,291
  
       
                                
   Foreign currency translation (loss) gain  
    
670,518
      
  (192,935
)
    
  1,828,910
      
7,066
  
COMPREHENSIVE INCOME
  
$
4,553,966
    
$
2,080,997
    
$
11,526,648
    
$
6,753,357
  
       
                                
EARNINGS PER SHARE
                                
   Basic and diluted  
  
$
0.26
    
$
0.15
    
$
0.66
    
$
0.46
  
Weighted average number of shares outstanding  
                                
   Basic and diluted  
    
14,779,268
      
  14,765,942
      
  14,777,015  
      
14,765,568
  
 
 


Ever-Glory International Group, Inc. Reports