-- 1Q09 Total Net Sales Increased 3.9% YoY to $20.5 Million -- --
1Q09 Gross Margin Increased 420 Basis Points YoY to 23.0% -- --
1Q09 Net Income Increased 34.1%YoY to $1.6 Million -- -- Company
Reiterates Comfort with Full Year 2009 Financial Forecast --
NANJING, China, May 13 /PRNewswire-Asia-FirstCall/ -- Ever-Glory
International Group, Inc. (the "Company," "Ever-Glory") (NYSE Amex:
EVK), a leading apparel supply chain manager and retailer in China,
today reported its financial results for the quarter ended March
31, 2009. During the first quarter 2009, net sales increased 3.9%
to $20.5 million from $19.7 million in the same period of 2008.
This increase was primarily attributable to increased sales orders
in our wholesale business to customers in Japan and increased sales
in the Company's retail business. Retail sales from LA GO GO, the
Company's branded retail division, increased to $2.5 million, or
12.3% of total net sales, compared to $120 thousand in the prior
year period. "Our performance was solid during the first quarter of
2009, especially given the global economic slowdown," commented Mr.
Edward Yihua Kang, Chairman of the Board and Chief Executive
Officer of Ever-Glory. "Our growth held steady in the quarter and
we believe that our business model as a one-stop- service for
wholesale apparel production will continue to position us very
competitively going forward. We remain focused on developing a high
quality production platform and expanded production capacity. We
have increased the innovative fashion concepts within our wholesale
business by strengthening our design talent and enhanced our
R&D infrastructure to add more style samples and fabric
sampling. These efforts should allow us to broaden our sales
opportunities even during challenging market conditions." Mr. Kang
continued, "We are very encouraged by our retail strategy and the
roll out of our LA GO GO stores. Sales generated from our retail
business increased considerably in the first quarter of 2009 which
demonstrated the strong momentum we have with our retail strategy.
In the first quarter of 2009, we opened nine new LA GO GO stores
for a total of 102 open stores, as of March 31, 2009. Through May
13, 2009, we opened 19 LA GO GO stores in 2009 and now have a total
of 112 LA GO GO stores in China." In the first quarter of 2009,
gross profit increased 26.7% to $4.7 million from $3.7 million in
the same period of 2008. Gross margin increased 420 basis points to
23.0% in the first quarter of 2009, compared to 18.8% in the same
period of 2008 largely due to increased fixed processing fees on
certain manufacturing orders as well as increased leverage in the
retail business. Selling expenses increased to $940 thousand in the
first quarter of 2009 from $278 thousand in the first quarter of
2008. This increase was primarily due to increased retail marketing
expenses to promote LA GO GO. General and administrative expenses
increased 31.4% to $1.9 million from $1.4 million in the first
quarter of 2008. The increase was primarily due to increased
payroll to retain and attract management staff in order to execute
the Company's business expansion as well as additional costs to
support the Company's retail operations. Income from operations for
the first quarter of 2009 was $1.9 million, or 9.4% of total sales,
compared to $2.0 million, or 10.3% of sales, in the first quarter
of 2008. Net income for the first quarter of 2009 increased 34.1%
to $1.6 million or $0.12 per diluted share from $1.2 million, or
$0.10 per diluted share in the same period of 2008. Balance Sheet
and Cash Flow As of March 31, 2009, the Company had $3.8 million of
cash and cash equivalents, compared to $1.4 million at December 31,
2008, Ever-Glory had working capital of approximately $15.5 million
at March 31, 2009. The Company had bank loans of $6.6 million as of
March 31, 2009. Business Outlook For the second quarter of 2009,
the Company anticipates total net sales of $20 million to $25
million and net income of $1.2 million to $1.5 million. This
compares to second quarter 2008 sales of $24 million and net income
of $1.3 million. For full year 2009, the Company anticipates total
net sales of $120 million to $135 million and net income of $5.8
million to $6.5 million. The full year revenue forecast is
comprised of $110 million to $120 million in expected wholesale
revenue and $10 million to $15 million in expected revenue from
retail. Mr. Kang continued, "Even in such a difficult economic
environment, we are encouraged with the opportunities in our
business moving forward. We believe our unique operating philosophy
provides us with a distinct competitive advantage over our peers.
The nature of our one-stop-service has Ever-Glory involved in all
aspects of apparel production -- product design and development,
sourcing and sampling, quality control, manufacturing and
logistics. We achieve better results by shortening the time to
market, improving product quality control and ultimately achieving
higher margins. As we execute our strategic vision, we continue to
leverage our intimate market knowledge, experienced sourcing
professionals and efficient management to deploy a global sourcing
and product development network while maintaining strict product
quality control and expense control. We place considerable emphasis
on innovative and distinctive product designs that stand for
exceptional styling and quality for both our wholesale and retail
businesses. As we increase our network of professional designers,
marketers and R&D team members, we believe we have a unique
opportunity to expand our presence as a major player in the
international wholesale and domestic retail apparel market."
Conference Call The Company will hold a conference call today at
8:30 a.m. ET which will be hosted by Edward Kang, Chairman of the
Board, President, and CEO, Yan Guo, Chief Financial Officer.
Listeners may access the call by dialing #1-913-312- 0953. 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 May 13, 2009 through May 20, 2009 by calling
#1-719-457-0820; pin number: 7464961. A webcast of the call will
also be available on the Company's web at:
http://www.everglorygroup.com/ . 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 Amex), and has a focus
on middle-to-high grade casual wear, outerwear, and sportswear
brands. The Company 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." Safe Harbor Statement Certain
statements in this release and other written or oral statements
made by or on behalf of the Company are "forward looking
statements" within the meaning of the federal securities laws.
Statements regarding future events and developments and our 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 market acceptance of the Company's products and projects,
the Company's continued access to capital, currency exchange rate
fluctuation and other risks and uncertainties. The actual results
the Company achieves may differ materially from those contemplated
by any forward-looking statements due to such risks and
uncertainties. These statements are based on our 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. EVER-GLORY INTERNATIONAL
GROUP, INC. AND SUBSDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED
MARCH 31, 2009 AND 2008 (UNAUDITED) 2009 2008 NET SALES Related
parties $ -- $ 425,102 Third parties 20,507,822 19,322,106 Total
net sales 20,507,822 19,747,208 COST OF SALES Related parties --
402,748 Third parties 15,793,667 15,623,424 Total cost of sales
15,793,667 16,026,172 GROSS PROFIT 4,714,155 3,721,036 OPERATING
EXPENSES Selling expenses 940,474 277,528 General and
administrative expenses 1,856,122 1,412,654 Total Operating
Expenses 2,796,596 1,690,182 INCOME FROM OPERATIONS 1,917,559
2,030,854 OTHER INCOME (EXPENSES) Interest income 103,547 31,974
Interest expense (123,650) (577,828) Other income 2,373 -- Total
Other Income (Expenses) (17,730) (545,854) INCOME BEFORE INCOME TAX
EXPENSE 1,899,829 1,485,000 INCOME TAX EXPENSE (289,071) (283,838)
NET INCOME 1,610,758 1,201,162 ADD(LESS): NET LOSS(INCOME)
ATTRIBUTABLE TO THE NONCONTROLING INTEREST 11,598 (3,869) NET
INCOME ATTRIBUTABLE TO THE COMPANY 1,622,356 1,197,293 Foreign
currency translation (loss) gain (44,208) 1,099,884 COMPREHENSIVE
INCOME 1,578,148 2,297,177 COMPREHENSIVE INCOME ATTRIBUTABLE TO THE
NONCONTROLING INTEREST (12,392) 23,457 COMPREHENSIVE INCOME
ATTRIBUTABLE TO THE COMPANY $ 1,590,540 $ 2,273,720 NET INCOME PER
SHARE Attributable to the Company's common stockholders Basic $
0.12 $ 0.10 Diluted $ 0.12 $ 0.10 Weighted average number of shares
outstanding Basic 13,531,225 11,449,682 Diluted 13,531,225
12,204,363 CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31,
2009 (UNAUDITED) AND DECEMBER 31, 2008 ASSETS March 31, December
31, 2009 2008 (unaudited) CURRENT ASSETS Cash and cash equivalents
$ 3,833,600 $ 1,445,363 Accounts receivable 12,970,781 9,485,338
Accounts receivable - related parties 73,900 -- Inventories
2,856,073 3,735,227 Other receivables and prepaid expenses 433,038
945,191 Advances on inventory purchases 209,321 288,256 Amounts due
from related party 10,754,680 11,565,574 Total Current Assets
31,131,393 27,464,949 LAND USE RIGHT, NET 2,834,195 2,854,508
PROPERTY AND EQUIPMENT, NET 12,799,944 12,494,452 INVESTMENT AT
COST 1,465,000 1,467,000 TOTAL ASSETS $ 48,230,532 $ 44,280,909
LIABILITIES AND EQUITY CURRENT LIABILITIES Bank loans $ 6,592,500 $
6,542,820 Accounts payable 5,290,568 3,620,543 Other payables -
related party 903,416 754,589 Other payables and accrued
liabilities 1,813,614 1,683,977 Value added and other taxes payable
656,583 368,807 Income tax payable 207,550 257,946 Deferred tax
liabilities 176,086 80,009 Total Current Liabilities 15,640,317
13,308,691 LONG-TERM LIABILITIES Loan from related party 2,689,350
2,660,085 TOTAL LIABILITIES 18,329,667 15,968,776 COMMITMENTS AND
CONTINGENCIES EQUITY Stockholders' equity of the Company 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, 12,394,652 and 12,373,567 shares
issued and outstanding as of March 31,2009 and December 31, 2008,
respectively) 12,395 12,374 Additional paid-in capital 4,571,164
4,549,004 Retained earnings 17,429,895 15,807,539 Statutory reserve
3,437,379 3,437,379 Accumulated other comprehensive income
3,912,652 3,956,860 Total Stockholders' Equity of the Company
29,363,485 27,763,156 Noncontrolling interest 537,380 548,977 Total
Equity 29,900,865 28,312,133 TOTAL LIABILITIES AND EQUITY $
48,230,532 $ 44,280,909 CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS FOR THE MONTHS ENDED MARCH 31, 2009 AND 2008 (UNAUDITED) 2009
2008 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,610,758 $
1,201,162 Adjustments to reconcile net income to cash provided by
operating activities: Depreciation and amortization 484,005 238,432
Deferred income tax 96,194 -- Amortization of discount on
convertible notes -- 349,337 Amortization of deferred financing
costs -- 73,676 Stock issued for interest -- 2,006 Changes in
operating assets and liabilities Accounts receivable (3,488,612)
1,941,016 Accounts receivable - related parties (73,905) 161,317
Inventories 874,121 121,586 Other receivables and prepaid expenses
(227,276) (8,636) Advances on inventory purchases 78,547 (9,058)
Amounts due from related party 795,181 (44,291) Accounts payable
1,675,077 299,523 Accounts payable - related parties 148,837
(68,882) Other payables and accrued liabilities 151,499 (204,734)
Other payables-related parties 2,327 -- Value added and other taxes
payable 288,298 123,406 Income tax payable (50,047) 196,038 Long
term deferred expense (56,406) Net cash provided by operating
activities 2,365,004 4,315,492 CASH FLOWS FROM INVESTING ACTIVITIES
Other payables-related party -- -- Investment in La Chapelle --
(1,397,700) Purchase of property and equipment (65,719) (84,333)
Proceeds from sale of equipment 3,778 377 Net cash used in
investing activities (61,941) (1,481,656) CASH FLOWS FROM FINANCING
ACTIVITIES Contribution from minority shareholders -- 553,040
Proceeds from bank loans 5,860,400 -- Repayment of bank loans
(5,801,796) (2,096,550) Proceeds from long term loan 29,265 59,116
Net cash provided by financing activities 87,869 (1,484,394) EFFECT
OF EXCHANGE RATE CHANGES ON CASH (2,695) 153,487 NET INCREASE IN
CASH AND CASH EQUIVALENTS 2,388,237 1,502,930 CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD 1,445,363 641,739 CASH AND CASH
EQUIVALENTS AT END OF PERIOD $ 3,833,600 $ 2,144,669 SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period
for: Interest $ 144,646 $ 68,859 Income taxes $ 242,924 $ 84,576
DATASOURCE: Ever-Glory International Group, Inc. CONTACT: Company
Contact - Ever-Glory International Group, Inc., Yan Guo, Chief
Financial Officer, +86-25-5209-6222; Investor Relations: In the
U.S.: Brian M. Prenoveau, CFA, ICR, Inc., +1-203-682-8200, or In
Asia: Bill Zima & Yuening Jiang, +86-10-6599-7965 Web Site:
http://www.everglorygroup.com/
Copyright