Ever-Glory Reports First Quarter 2019 Financial Results

NANJING,China,May 14,2019 -- Ever-Glory International Group,Inc. (the "Company" or "Ever-Glory") (NASDAQ: EVK),a retailer of branded fashion apparel and a leading global apparel supply chain solution provider,reported its financial results today for the first quarter ended March 31,2019.

Mr. Yihua Kang,Chairman,President and Chief Executive Officer of Ever-Glory,said,"During the first quarter,we maintained our focus on developing the retail business through our multi-brand strategy and store network optimization initiative,while improving our wholesale business by upgrading customer portfolio and enhancing our account receivables. Notably,we achieved year-over-year improvement in gross profitof 13.0% for our wholesale business."

"During the first quarter of 2019,we remained our focus on driving retail business through store network optimization strategy,as well as inventory management strategy," Mr. Kang continued. "Following the remodeling or relocation of 7 stores during 2019,we operated a nationwide network of 1,315 stores as of December 31,2019."

"Looking at our wholesale business,we maintained focus on upgrading customer portfolio to reduce credit risk and improve margin in the light of weak micro environment and enhancing our account receivables. Going forward,we'll implement a stricter client evaluation system and remain diligent in account receivables collection. We believe the enduring strength of our wholesale business will support its long-term profitability." concluded Mr. Kang.

Mr. Jason Jiansong Wang,Chief Financial Officer of Ever-Glory,added,"The first quarter results,coupled with our ability to increase operating leverage,resulted in expanded wholesale operating income during this quarter. Going forward,we remain confident in the long-term prospects of our business and we will continue implementing our margin enhancement and cost control measures to further strengthen the profitability of our business."

First Quarter 2019 Financial Results

Total salesfor the first quarter of 2019 were $88.0 million,a decrease of 5.2% from $92.8 million in the first quarter of 2018. This decrease was primarily driven by an 11.4% decrease in our retail business,partially offset by an 11.3% increase in wholesale business.

Sales for the Company's branded fashion apparel retail division decreased by 11.4% to $59.9 million for the first quarter of 2019,compared with $67.5 million for the first quarter of 2018. This decrease was primarily due to a decrease in same-store sales. The Company had 1,315retail stores as of March 31,2019,compared with 1,409retail stores as of March 31,2018.

Salesfor the Company's wholesale divisionincreased by 11.3% to $28.1 million for the first quarter of 2019,compared with $25.3 million for the first quarter of 2018. This increase was primarily attributable to increased sales in Mainland China,other European markets and Japan partially offset for decreased sales in Hong Kong,the United States,the United Kingdom and Germany.

Total gross profit for the first quarter of 2019 decreased by6.3% to $29.4 million,compared with $31.3 million for the first quarter of 2018. Total gross margin decreased to 33.4% from 33.8% for the first quarter of 2018.

Gross profit for the retail businessdecreased by 10.7% to $22.8 million for the first quarter of 2019,compared with $25.5 million for the first quarter of 2018. Gross margin was 38.1%,compared to37.8% for the first quarter of 2018.

Gross profitfor the wholesale businessincreasedby 13.0% to $6.6 million for the first quarter of 2019,compared with $5.8 million for the first quarter of 2018. Gross margin increased to 23.3% from 23.0% for the first quarter of 2018.

Selling expensesfor the first quarter of 2019 decreased by 5.5% to $21.0 million,or 23.9% of total sales,compared with $22.2 million,or 24.0% of total salesfor the first quarter of 2018. The decrease was attributable to the decreased sales.

General and administrative expensesfor the first quarter of 2019 decreased by 1.9% to $7.5 million,or 8.6% of total sales,compared with $7.7 million,or 8.3% of total salesfor the first quarter of 2018. The decrease was mainly attributable to the decreased office expenses.

Income from operationsfor the first quarter of 2019 decreased by 43.2% to $0.8million compared with $1.4million for the first quarter of 2018.

Net income(loss) attributableto the Companyfor the first quarter of 2019 was ($0.5)million compared with $0.8 million for the first quarter of 2018. Basic and diluted earnings(loss) per share were ($0.04) for the first quarter of 2019 compared with basic and diluted earnings per share of $0.06 for the first quarter of 2018.

Balance Sheet

As of March 31,Ever-Glory had approximately $57.9 million of cash and cash equivalents,compared with approximately $47.0million as of December 31,2018. Ever-Glory had working capital of approximately $28.5 million as of March 31,and outstanding bank loans of approximately $28.8million as of March 31,2019.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on May 14,2019(8:00 p.m. Beijing Time on May 14,2019). Listeners can access the conference call by dialing +1-800-289-0438 or + 1-323-794-2423 and using the access code 7887070. 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 14 through 11:59 p.m. Eastern Time on May 21,by dialing +1-844-512-2921 or +1-412-317-6671 and using the access code 7887070.

About Ever-Glory International Group,Inc.

Based in Nanjing,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 in China under its own brands "La go go","Velwin","Sea To Sky" and "idole". 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 supply chain management services,including: 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,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

Dandan Song

Tel: +86-25-5209-6817

E-Mail: sdd@ever-glory.com.cn

EVER-GLORY INTERNATIONAL GROUP,INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

AS OF MARCH 31,2019 AND DECEMBER 31,2018 (UNAUDITED)

2019

2018

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

57,876

$

47,012

Accounts receivable,net

57,595

86,527

Inventories

55,035

65,929

Advances on inventory purchases

6,087

6,420

Value added tax receivable

1,229

2,580

Other receivables and prepaid expenses

6,365

10,204

Amounts due from related parties

75

192

Total Current Assets

184,262

218,864

NONCURRENT ASSETS

Intangible assets,net

5,046

4,962

Property and equipment,net

29,135

28,445

Operating lease right-of-use assets

64,549

-

Total Non-Current Assets

98,730

33,407

TOTAL ASSETS

$

282,992

$

252,271

LIABILITIES AND STOCKHOLDERS'EQUITY

CURRENT LIABILITIES

Bank loans

$

28,839

$

29,497

Accounts payable

51,470

78,412

Accounts payable and other payables – related parties

4,040

4,756

Other payables and accrued liabilities

13,769

21,958

Value added and other taxes payable

1,305

2,569

Income tax payable

862

1,569

Current operating lease liabilities

55,434

-

Total Current Liabilities

155,719

138,761

NONCURRENT LIABILITIES

Deferred tax liabilities

330

354

Non-current operating lease liabilities

9,127

-

TOTAL LIABILITIES

165,176

139,115

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

Stockholders' equity:

Preferred stock ($0.001 par value,authorized 5,000,000 shares,no sharesissued

and outstanding)

-

-

Common stock ($0.001 par value,authorized 50,14,800,140 and

14,798,198 shares issued and outstanding As of March 31,2019 and December

31,2018,respectively)

15

15

Additional paid-in capital

3,635

3,627

Retained earnings

105,393

105,914

Statutory reserve

19,083

19,083

Accumulated other comprehensive income

394

(3,578)

Amounts due from related party

(9,253)

(10,354)

Total equity attributable to stockholders of the Company

119,267

114,707

Noncontrolling interest

(1,451)

(1,551)

Total Equity

117,816

113,156

TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY

$

282,271

EVER-GLORY INTERNATIONAL GROUP,INC. AND SUBSIDIARIES CONDENSED

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME

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

FOR THE THREE MONTHS ENDED MARCH 31,2019 AND 2018 (UNAUDITED)

2019

2018

SALES

$

87,956

$

92,785

COST OF SALES

58,598

61,440

GROSS PROFIT

29,358

31,345

OPERATING EXPENSES

Selling expenses

21,008

22,225

General and administrative expenses

7,529

7,674

Total operating expenses

28,537

29,899

INCOME FROM OPERATIONS

821

1,446

OTHER INCOME (EXPENSE)

Interest income

207

326

Interest expense

(363)

(564)

Other income (expenses)

(295)

136

Total other expenses

(451)

(102)

INCOME BEFORE INCOME TAX EXPENSE

370

1,344

INCOME TAX EXPENSE

(825)

(757)

NET INCOME(LOSS)

(455)

587

Net income(loss) attributable to the non-controlling interest

(66)

228

NET INCOME(LOSS) ATTRIBUTABLE TO THE COMPANY

$

(521)

$

815

NET INCOME(LOSS)

$

(455)

$

587

Foreign currency translation gain

3,972

4,023

COMPREHENSIVE INCOME

$

3,517

$

4,610

Comprehensive loss attributable to the noncontrolling interest

100

270

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY

$

3,617

$

4,880

EARNINGS(LOSS) PER SHARE:

Basic and diluted

$

(0.04)

$

0.06

Weighted average number of shares outstanding Basic and diluted

14,140

14,795,992

EVER-GLORY INTERNATIONAL GROUP,INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

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

FOR THE THREE MONTHSENDED March 31,2019 AND 2018 (Unaudited)

Additional

Retained Earnings

Accumulated

other

Amounts

due from

Total

equity

attributable

to stockholders

Non-

Common Stock

paid-in

Statutory

Comprehensive

related

of the

controlling

Total

Shares

Amount

capital

Unrestricted

reserve

income

party

Company

Interest

equity

Balance at

January 1,

2019

14,198

$

15

$

3,627

$

105,914

$

19,083

$

(3,578)

$

(10,354)

$

114,707

(1,551)

$

113,156

Stock issued

forcompensation

1,942

0.004

8

-

-

-

-

8

8

Net income (loss)

-

-

-

(521)

-

-

-

(521)

66

(455)

Net cash paid to

related party under

counter guarantee

agreement

-

-

-

-

-

-

1,101

1,101

-

1,101

Foreign currency

translation loss

3,972

-

3,972

34

4,006

Balance at March

31,2019

14,140

$

15

$

3,635

$

105,393

$

19,083

$

394

$

(9,253)

$

119,267

(1,451)

$

117,816

Additional

Retained Earnings

Accumulated

other

Amounts

due from

Total

equity

attributable

to stockholders

Non-

Common Stock

paid-in

Statutory

Comprehensive

related

of the

controlling

Total

Shares

Amount

capital

Unrestricted

reserve

income

party

Company

Interest

equity

Balance at

January1,

2018

14,992

$

15

$

3,620

$

95,195

$

17,794

$

2,585

$

(15,449)

$

103,760

(1,062)

$

102,698

Net income (loss)

-

-

-

815

-

-

-

815

(228)

587

Net cash paid to

related party under

counter guarantee

agreement

-

-

-

-

-

-

(8,480)

(8,480)

-

(8,480)

Foreign currency

translation loss

4,023

-

4,023

(94)

3,929

Balance at March

31,2018

14,620

$

96,010

$

17,794

$

6,608

$

(23,929)

$

100,118

(1,384)

$

98,734

EVER-GLORY INTERNATIONAL GROUP,INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. Dollars,2019 AND 2018 (UNAUDITED)

2019

2018

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$

(455)

$

587

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization

2,225

2,537

Loss from sale of property and equipment

52

4

Provision for obsolete inventories

1,824

1,626

Deferred income tax

(145)

(234)

Stock-based compensation

8

-

Changes in operating assets and liabilities

Accounts receivable

31,027

28,466

Inventories

10,557

(129)

Value added tax receivable

1,406

1,895

Other receivables and prepaid expenses

3,975

832

Advances on inventory purchases

490

(1,175)

Amounts due from related parties

103

(165)

Accounts payable

(26,505)

(17,944)

Accounts payable and other payables- related parties

(741)

(653)

Other payables and accrued liabilities

(9,565)

(5,182)

Value added and other taxes payable

(2,788)

(1,988)

Income tax payable

(327)

(670)

Net cash provided by operating activities

11,141

7,807

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment

(2,131)

(2,552)

Net cash used in investing activities

(2,552)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from bank loans

6,029

17,346

Repayment of bank loans

(7,408)

(14,780)

Repayment of loans from related party

3,488

-

Advances to related party

(2,163)

(7,692)

Net cash used in financing activities

(54)

(5,126)

EFFECT OF EXCHANGE RATE CHANGES ON CASH

1,908

2,172

NET INCREASE IN CASH AND CASH EQUIVALENTS

10,864

2,301

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

47,012

62,876

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

57,876

$

65,177

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:

Interest

$

363

$

564

Income taxes

$

126

$

1,938

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