Ever-Glory Reports First Quarter 2016 Financial Results

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 profit for 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.

Balance Sheet

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.

Conference Call

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.

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 
Yanhua Huang
Tel: +86-25-52096875
E-Mail: [email protected]

The Piacente Group, Inc. 
Emilie Wu
China: +86-10-6535-0148
US: +1-212-481-2050
E-Mail: [email protected]

SOURCE Ever-Glory International Group, Inc.

Related Links

http://www.everglorygroup.com