NANJING, China, March 31, 2015 /PRNewswire/ — Ever-Glory International Group, Inc. (the “Company” or “Ever-Glory”) (NASDAQ Global Market: EVK), a retailer of branded fashion apparel and a leading global apparel supply chain solution provider based in China, today reported its financial results for its fiscal year ended December 31, 2014.
Full Year 2014 Highlights
- Total net sales increased 25.0% YOY to $460.1 million
- Gross profit increased 29.2% YOY to $122.2 million
- Operating income increased 20.2% YOY to $21.8 million
- Net income increased 52.4% YOY to $16.4 million
- 2014 EPS of $1.11 compared to 2013 EPS of $0.73
Mr. Edward Yihua Kang, CEO of Ever-Glory commented, “I’m pleased to see our business maintain stable growth, while the macro environment remains challenging in 2014. In 2014, our retail business added two retail brands “Velwin” and “Sea To Sky”, which also sell women’s apparel but have different brand positioning than La go go. We believe the multi-brand strategy will improve our market share and expand our competitive position through the accurate positioning of each brand. In our wholesale business, we remain dedicated to service well-known brands and retail stores by providing a complete set of supply chain management. In 2015, we will continue to focus on high value-added solutions.”
Full Year 2014 Results
Total sales for the year ended December 31, 2014 were $460.1 million, an increase of 25.0% from the year ended December 31, 2013. This increase was primarily attributable to a 29.0% increase in the retail business as well as a 20.8% increase in the wholesale business.
In 2014, retail sales from the Company’s branded fashion apparel retail division, increased 29.0% to $244.7 million, compared to $189.7 million in 2013. This increase was primarily due to the increase in both new stores opened and same store sales. Ever-Glory had 1,201 retail stores as of December 31, 2014, compared to 960 retail stores at December 31, 2013.
In 2014, wholesale sales increased 20.8% to $215.5 million, compared to $178.3 million in 2013. The increase was primarily attributable to increased sales in PRC, Germany, United States and Europe partially offset by decreased sales in United Kingdom and Japan.
Total gross profit for the year 2014 was $122.2 million, or 26.6% of total sales, compared to $94.6 million, or 25.7% of total sales last year.
Selling expenses for the year 2014 increased 30.8% to $67.7 million compared to $51.8 million last year. As a percentage of sales, selling expenses increased 60 basis points to 14.7% compared to 14.1 % last year.
General and administrative expenses for the year 2014 increased 32.5% to $32.7 million compared to $24.7 million last year. As a percentage of sales, general and administrative expenses increased 40 basis points to 7.1% compared to 6.7% last year.
Income from operations increased by 20.2% to $21.8 million in 2014 from $18.1 million in 2013. As a percent of sales, income from operations decreased 20 basis points to 4.7% compared to 4.9% last year.
For 2014, net income was $16.4 million, or $1.11 per diluted share, an increase of 52.4% from $10.7 million, or $0.73 per diluted share in 2013. Net income for 2013 includes approximately $0.3 million, or $0.02 per diluted share, of non-cash income related to the change in fair value of a derivative liability.
Balance Sheet and Cash Flow
As of December 31, 2014, Ever-Glory had approximately $34.1 million of cash and cash equivalents, compared to approximately $27.8 million as of December 31, 2013. Ever-Glory had working capital of approximately $48.5 million as of December 31, 2014, and outstanding bank loans of approximately $60.2 million as of December 31, 2014.
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, 2014. Ever-Glory offers apparel to woman under its own brands “La go go”, “Velwin” and “Sea To Sky” and currently operates over 1,201 retail locations 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 etc.
The Company will hold a conference call today at 8:00 a.m. Eastern Time which will be hosted by Edward Yihua Kang, Chairman of the Board, President, and CEO, and Jason Jiansong Wang, Chief Financial Officer. Listeners can access the conference call by dialing # 1-913-312-1403 and referring to the confirmation code 7993658. 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. March 31, 2015 through April 7, 2015 Eastern Time by calling # 1-858-384-5517; pin number: 7993658.
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 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.
EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
COST OF SALES
General and administrative expenses
Total operating expenses
INCOME FROM OPERATIONS
OTHER INCOME (EXPENSE)
Change in fair value of derivative liability
Total other income(expense)
INCOME BEFORE INCOME TAX EXPENSE
INCOME TAX EXPENSE
Foreign currency translation (loss) gain
EARNINGS PER SHARE:
Basic and diluted
Weighted average number of shares outstanding
Basic and diluted
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