NANJING, China, Nov. 12, 2012 /PRNewswire/ -- Ever-Glory International Group, Inc. (the "Company" or "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, 2012.
Total sales for the quarter were $69.3 million, an increase of 29.1% compared to $53.7 million in the third quarter of last year. This increase was primarily attributable to increased sales in our retail business as well as our wholesale business.
Retail sales for the quarter from LA GO GO, the Company's branded retail division, increased 109.5% to $24.4 million, compared to $11.6 million last year. This increase was primarily due to the increase in new stores opened and same store sales. Ever-Glory had 644 LA GO GO stores as of September 30, 2012, compared to 421 LA GO GO stores as of September 30, 2011. Currently, there are LA GO GO stores in more than 20 provinces in China.
Wholesale sales generated from the Company's wholesale business for the quarter increased 6.8% to $44.9 million, compared to $42.0 million last year. This increase was primarily attributable to increased sales in the United Kingdom and Japan.
Total gross profit for the quarter was $15.3 million, or 22.1% of total sales, compared to $11.2 million, or 20.9% of total sales last year.
Selling expenses for the quarter increased 102.2% to $8.6 million compared to $4.3 million last year. As a percentage of sales, selling expenses increased 450 basis points to 12.4% compared to 7.9% last year. The increase was attributable to the increased number of stores, leading to increased numbers of retail employees and increased average salaries, as well as the increased store decoration and marketing expenses associated with the promotion of the LA GO GO brand.
General and administrative expenses for the quarter increased 20.6% to $4.2 million compared to $3.4 million last year. As a percentage of sales, general and administrative expenses decreased 40 basis points to 6.0% compared to 6.4% last year. The decrease was attributable to the increase in sales.
Income from operations for the quarter decreased 26.5% to $2.6 million compared to $3.5 million last year as a result of increased selling expenses for our retail business
For the third quarter, net income was $2.3 million, or $0.15 per diluted share, a decrease of 15.9% from $2.7 million, or $0.18 per diluted share in the third quarter of 2011.
Balance Sheet and Cash Flow
As of September 30, 2012, Ever-Glory had approximately $10.4 million of cash and cash equivalents, compared to approximately $8.8 million as of December 31, 2011. Ever-Glory had working capital of approximately $39.4 million as of September 30, 2012, and outstanding bank loans of approximately $38.6 million as of September 30, 2012.
For the fourth quarter of 2012, Every-Glory anticipates total net sales in the range of $70 to $90 million and net income in the range of $3.6 to $5.0 million. For full year 2012, Every-Glory anticipates total net sales in the range of $230 to $260 million and net income in the range of $9.5 to $12 million. The full year revenue forecast is comprised of $140 to $160 million in anticipated wholesale revenue and $90 to $100 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".
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 # 1-719-325-2473 and referring to the confirmation code 9757142. 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 12, 2012 through November 17, 2012 Eastern Time by calling # 1-858-384-5517; pin number: 9757142.
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 SUBSDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011 (UNAUDITED)
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Total Operating Expenses
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INCOME BEFORE INCOME TAX EXPENSE
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EARNINGS PER SHARE
Basic and diluted
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SOURCE Ever-Glory International Group, Inc.