2022-11-14 | NDAQ:EVK | Press Release

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

September 30,

2022

December 31,

2021

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

32,177

$

56,573

Restricted cash

39,706

40,768

Trading securities

2,189

3,251

Accounts receivable, net

79,875

69,859

Inventories

49,038

63,841

Advances on inventory purchases

4,260

8,179

Value added tax receivable

2,144

1,693

Other receivables and prepaid expenses

6,049

6,345

Amounts due from related parties

–

220

Total Current Assets

215,438

250,729

NON-CURRENT ASSETS

Equity security investment

4,566

5,682

Intangible assets, net

4,211

4,794

Property and equipment, net

31,148

36,340

Operating lease right-of-use assets

38,905

50,077

Deferred tax assets

768

899

Other non-current assets

3,520

784

Total Non-Current Assets

83,118

98,576

TOTAL ASSETS

$

298,556

$

349,305

CURRENT LIABILITIES

Bank loans

$

63,360

$

68,992

Accounts payable

59,894

67,930

Accounts payable and other payables – related parties

2,907

1,332

Other payables and accrued liabilities

14,166

18,531

Value added and other taxes payable

842

999

Income tax payable

1,107

334

Current operating lease liabilities

31,538

41,633

Total Current Liabilities

173,814

199,751

Non-current operating lease liabilities

7,538

8,596

TOTAL LIABILITIES

181,352

208,347

COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS’ EQUITY

Common stock ($0.001 par value, authorized 50,000,000 shares, 14,818,006

and 14,655,926 issued and outstanding as of September 30, 2022,

respectively, 14,812,312 and 14,664,978 issued and outstanding as of

December 31, 2021, respectively)

15

15

Additional paid-in capital

3,670

3,660

Retained earnings

99,398

108,210

Statutory reserve

21,245

21,245

Treasury stock (at cost,162,080 and 147,334 shares at September 30, 2022

and December 31, 2021, respectively)

(400)

(363)

Accumulated other comprehensive (loss) income

(6,724)

8,191

Total Equity

117,204

140,958

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

298,556

$

349,305

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

Three months ended

Nine months ended

September 30,

September 30,

2022

2021

2022

2021

NET SALES

$

106,437

$

94,406

$

235,022

$

225,776

COST OF SALES

90,390

71,196

181,194

161,738

GROSS PROFIT

16,047

23,210

53,828

64,038

OPERATING EXPENSES

Selling expenses

12,792

14,443

38,153

44,495

General and administrative expenses

9,306

9,467

21,821

24,980

Total Operating Expenses

22,098

23,910

59,974

69,475

LOSS FROM OPERATIONS

(6,051)

(700)

(6,146)

(5,437)

OTHER (EXPENSES) INCOME

Interest income

22

176

299

928

Interest expense

(524)

(1,218)

(1,458)

(1,909)

Government subsidy

192

340

397

842

(Loss) gain from changes in fair values of investments

(915)

(123)

(1,587)

2,151

Other income

317

253

885

1,027

Total Other (Expenses) Income, Net

(908)

(572)

(1,464)

3,039

LOSS BEFORE INCOME TAX EXPENSE

(6,959)

(1,272)

(7,610)

(2,398)

Income tax benefit (expense)

835

(1,945)

(1,203)

(3,759)

NET LOSS

$

(6,124)

$

(3,217)

$

(8,813)

$

(6,157)

Foreign currency translation (loss) gain

(6,336)

(1,061)

(14,915)

1,020

COMPREHENSIVE LOSS

$

(12,460)

(4,278)

$

(23,728)

$

(5,137)

LOSS PER SHARE

Basic and diluted

$

(0.41)

$

(0.22)

$

(0.59)

$

(0.42)

Weighted average number of shares outstanding,

basic and diluted

14,817,053

14,811,073

14,815,077

14,810,585

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

Common Stock

Additional

Retained Earnings

Accumulated

Amounts

other

due from

Shares

Amount

paid-in

Treasury

Unrestricted

Statutory

comprehensive

related

Total equity

capital

stock

reserve

income (loss)

party

Balance at

January 1, 2022

14,812,312

$

15

$

3,660

$

(363)

$

108,210

$

21,245

$

$

–

$

140,958

Stock issued

for compensation

2,042

–

5

–

–

–

–

–

5

Net loss

–

–

–

–

(5,089)

–

–

–

(5,089)

Repurchase of

14,746 shares of

common stock

–

–

–

(37)

–

–

–

(37)

Foreign currency

translation loss

(836)

(836)

Balance at

March 31, 2022

14,814,354

$

15

$

3,665

$

(400)

$

103,121

$

21,245

$

7,355

$

–

$

135,001

Net income

–

–

–

–

2,400

–

–

–

2,400

Foreign currency

translation loss

(7,743)

(7,743)

Balance at

June 30, 2022

14,814,354

$

15

$

3,665

$

(400)

$

105,521

$

21,245

$

(388)

–

$

129,658

Stock issued

for compensation

3,652

–

5

–

–

–

–

–

5

Net loss

–

–

–

–

(6,123)

–

–

–

(6,123)

Foreign currency

translation loss

(6,336)

(6,336)

Balance at

September 30, 2022

14,818,006

$

15

$

3,670

$

(400)

$

99,398

$

21,245

$

(6,724)

$

–

$

117,204

Common Stock

Additional

Retained Earnings

Accumulated

Amounts

other

due from

Shares

Amount

paid-in

Treasury

Unrestricted

Statutory

comprehensive

related

Total equity

capital

stock

reserve

income

party

Balance at

January 1, 2021

14,809,160

$

15

$

3,650

$

–

$

109,171

$

20,376

$

4,590

$

(3,353)

$

134,449

Stock issued

for compensation

1,500

–

5

–

–

–

–

–

5

Net loss

–

–

–

–

(1,170)

–

–

–

(1,170)

Net cash received

from related

party under

counter guarantee agreement

–

–

–

–

–

–

–

379

379

Foreign currency

translation adjustment

(1,352)

(1,352)

Balance at

March 31, 2021

14,810,660

$

15

$

3,655

$

–

$

108,001

$

20,376

$

3,238

$

(2,974)

$

132,311

Net loss

–

–

–

–

(1,771)

–

–

–

(1,771)

Transfer to

reserve

–

–

–

–

–

–

–

–

–

Net cash

received from

related party under

counter guarantee

agreement

–

–

–

–

–

–

–

386

386

Foreign currency

translation adjustment

3,434

3,434

Balance at

June 30, 2021

14,810,660

$

15

$

3,655

$

–

$

106,230

$

20,376

$

6,672

$

(2,588)

$

134,360

Stock issued for

compensation

1,652

–

5

–

–

–

–

–

5

Net loss

–

–

–

–

(3,217)

–

–

–

(3,217)

Net cash received

from related party under

counter guarantee agreement

–

–

–

–

–

–

–

313

313

Foreign currency

translation adjustment

(1,062)

(1,062)

Balance at

September 30, 2021

14,812,312

$

15

$

3,660

$

–

$

103,013

$

20,376

$

5,610

$

(2,275)

$

130,399

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

Nine Months Ended

September 30,

2022

September 30,

2021

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$

(8,813)

(6,157)

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation and amortization

5,256

4,384

Loss from sale of property and equipment

141

590

Provision of bad debt allowance

3,943

676

Provision for obsolete inventories

5,296

842

Changes in fair value of trading securities

1,010

(200)

Changes in fair value of investments

577

(1,951)

Deferred income tax

42

644

Stock-based compensation

10

10

Changes in operating assets and liabilities

Accounts receivable

(20,334)

(8,614)

Inventories

4,353

(13,949)

Value added tax receivable

(671)

(1,235)

Other receivables and prepaid expenses

(434)

(1,096)

Advances on inventory purchases

3,317

586

Amounts due from related parties

211

(1,514)

Accounts payable

229

5,930

Accounts payable and other payables- related parties

1,779

(3,204)

Other payables and accrued liabilities

(5,124)

(3,332)

Value added and other taxes payable

891

(360)

Income tax payable

(81)

831

Net cash used in operating activities

(8,402)

(27,119)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment and intangible asset

(3,645)

(5,109)

Net proceeds from sale (purchase) of trading securities

52

(1,077)

Investment payment of other non-current assets

(3,028)

(773)

Net cash used in investing activities

(6,621)

(6,959)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from bank loans

56,018

56,110

Repayment of bank loans

(54,504)

(54,565)

Repurchase of common stock

(37)

–

Net collection of amounts due from related party (equity)

–

1,630

Net cash provided by financing activities

1,477

3,175

EFFECT OF EXCHANGE RATE CHANGES ON CASH

(11,912)

693

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

(25,458)

(30,211)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD

97,341

121,723

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

$

71,883

$

91,512

Reconciliation of cash, cash equivalents and restricted cash reported within their

consolidated balance sheets:

Cash and Cash Equivalents

32,177

48,336

Restricted cash

39,706

43,176

$

71,883

$

91,512

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:

Interest

$

1,458

$

1,909

Income taxes

$

1,175

$

2,272

SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES:

Common stock issued for compensation

$

10

$

10