Ever-Glory Reports First Quarter 2021 Financial Results

NEW YORK,May 14,2021 -- 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 firstquarter ended March 31,2021.

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."

"During the first quarter of 2021,our retail brands continue to attract new customers and retain existing customers by focusing on design,quality and value," Mr. Kang continued. "Following the remodeling or relocation of 50-100 stores during 2021,we operated a nationwide network of 921 stores as of March 31,2021."

"Looking at our wholesale business,we maintained focus on upgrading customer portfolio to reduce credit risk and improve margin in light of weak micro-environment and enhancing our account receivables. Going forward,we'll implement a stricter client evaluation system and remain diligent in our 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 firstquarter results,are coupled with our ability to increase operating leverage. 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 2021Financial Results

Total salesfor the first quarter of 2021were $70.8million,a increase of 21.4% from $58.4million in the first quarter of 2020. This increase was primarily driven by a4.2% increase in our wholesale businessanda 32.0% increase in retailbusiness.

Sales for the Company's branded fashion apparel retail division increased by 32.0% to $47.6 million for the first quarter of 2021,compared with $36.1 million for the first quarter of 2020. This increase was primarily due to the increase in same-store sales. The Company had 921retail stores as of March 31,2021,compared with 1,038retail stores as of March 31,2020.

Sales for the Company's wholesale divisionincreased by 4.2% to $23.2 million for the first quarter of 2021,compared with$22.3 million for the first quarter of 2020.This increase was primarily attributable to increased sales in Mainland China,Hong Kong,the United Kingdom,and other European markets partially offset for decreased sales in Japan and the United States.

Total gross profit for the first quarter of 2021increased by39.9% to $22.4 million,compared with $16 million for the first quarter of 2020. Total gross marginfor the first quarter of 2021increased to 31.7% from 27.5% for the first quarter of 2020.

Gross profit for the retail businessincreased by 42.5% to $17.9million for the first quarter of 2021,compared with $12.5million for the first quarter of 2020. Gross margin for the first quarter of 2021 was 37.6%compared to 34.8% for the first quarter of 2020.

Gross profit for the wholesale businessincreased by 30.5% to $4.6million for the first quarter of 2021,compared with $3.5million for the first quarter of 2020. Gross margin for the first quarter of 2021increased to 19.6% from 15.7% for the first quarter of 2020.

Selling expensesfor the first quarter of 2021increased by 15.4% to $15.5million,or 22.0% of total sales,compared with $13.5million,or 23.1% of total sales for the first quarter of 2020. The increase was attributable to the increased sales.

General and administrative expensesfor the first quarter of 2021increased by 35.7% to $7.9million,or 11.1% of total sales,compared with $5.8million,or 9.9% of total sales for the first quarter of 2020. The increase was mainly attributable to the decreased business trip and the exemption of social benefits by the PRC government in 2020.

Loss from operationswas $1.0 million for the first quarter of 2021,compared to $3.2 million for the first quarter of 2020.

Net loss attributableto the Company for the first quarter of 2021was $1.2million compared with $2.7million for first quarter of 2020. Basic and diluted lossper share were $0.08for the first quarter of 2021compared with $0.18for the first quarter of 2020.

Balance Sheet

As of March 31,Ever-Glory had approximately $78.1 million of cash and cash equivalents,compared with approximately $81.9million as of December 31,2020. Ever-Glory had working capital of approximately $43.7 million as of March 31,and outstanding bank loans of approximately $71.5million as ofMarch 31,2021.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on May 14,2021(8:00 p.m. Beijing Time on May 14,2021). Listeners can access the conference call by dialing +1-888-394-8218or + 1-647-484-0475and using the access code 7935539. 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 call will be available from 11:00 a.m. Eastern Time on May 14through 11:59 p.m. Eastern Time on May 21by calling +1-844-512-2921 or +1-412-317-6671with pin number 7935539.

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 in China under its own brands "La go go","Velwin"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 (Unaudited)

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

March31,

2021

December31,

2020

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

78,056

$

81,865

Restricted cash

45,660

39,858

Trading securities

3,036

1,792

Accounts receivable,net

46,719

53,285

Inventories

43,342

53,893

Advances on inventory purchases

7,802

10,261

Value added tax receivable

1,183

1,244

Other receivables and prepaid expenses

5,956

5,479

Amounts due from related parties

674

567

Total Current Assets

232,428

248,244

NON-CURRENT ASSETS

Equity security investment

3,877

3,932

Intangible assets,net

4,712

4,794

Property and equipment,net

31,881

32,164

Operating lease right-of-use assets

55,839

41,690

Deferred tax assets

879

902

Total Non-Current Assets

97,188

83,482

TOTAL ASSETS

$

329,616

$

331,726

LIABILITIES AND STOCKHOLDERS'EQUITY

CURRENT LIABILITIES

Bank loans

$

71,534

$

65,919

Accounts payable

52,083

67,762

Accounts payable and other payables – related parties

2,829

3,764

Other payables and accrued liabilities

13,522

16,073

Value added and other taxes payable

684

909

Income tax payable

704

1,062

Current operating lease liabilities

47,327

33,481

Total Current Liabilities

188,683

188,970

NON-CURRENT LIABILITIES

Non-current operating lease liabilities

8,622

8,307

TOTAL LIABILITIES

197,305

197,277

COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS' EQUITY

Stockholders' equity:

Common stock ($0.001 par value,authorized 50,000,000 shares,14,810,660 and

14,809,160 shares issued and outstanding as of March 31,2021 and December 31,

2020,respectively)

15

15

Additional paid-in capital

3,655

3,650

Retained earnings

108,001

109,171

Statutory reserve

20,376

20,376

Accumulated other comprehensive income

3,238

4,590

Amounts due from related party

(2,974)

(3,353)

Total equity

132,311

134,449

TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY

$

329,726

EVER-GLORY INTERNATIONAL GROUP,INC. AND SUBSIDIARIES CONDENSED

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

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

Three Months Ended

March31,

2021

March31,

2020

SALES

$

70,814

$

58,355

COST OF SALES

48,379

42,317

GROSS PROFIT

22,435

16,038

OPERATING EXPENSES

Selling expenses

15,548

13,478

General and administrative expenses

7,851

5,785

Total operating expenses

23,399

19,263

LOSS FROM OPERATIONS

(964)

(3,225)

OTHER INCOME (EXPENSE)

Interest income

224

277

Interest expense

(492)

(341)

Government subsidy

259

460

Other income (expense),net

532

358

Total other income (expense),net

523

754

LOSS BEFORE INCOME TAX

(441)

(2,471)

INCOME TAX EXPENSE

(729)

(227)

NET LOSS

(1,170)

(2,698)

Net income attributable to the non-controlling interest

-

(3)

NET LOSS ATTRIBUTABLE TO THE COMPANY

$

(1,170)

$

(2,701)

NET LOSS

$

(1,698)

Foreign currency translation loss

(1,352)

(1,437)

COMPREHENSIVE LOSS

$

(2,522)

$

(4,135)

Comprehensive loss attributable to the non-controlling interest

-

6

COMPREHENSIVE LOSS ATTRIBUTABLE TO THE COMPANY

$

(2,129)

LOSS PER SHARE:

Basic and diluted

$

(0.08)

$

(0.18)

Weighted average number of shares outstanding Basic and diluted

14,001

14,804,832

EVER-GLORY INTERNATIONAL GROUP,INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

FOR THE THREE MONTHSENDED March 31,2021 AND 2020 (Unaudited)

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

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 (loss)

party

Company

Interest

equity

Balance at

January 1,

2021

14,160

$

15

$

3,650

$

109,171

$

20,376

$

4,590

$

(3,353)

$

134,449

$

-

$

134,449

Stock-based

compensation

1,500

-

5

-

-

-

-

5

-

5

Net loss

-

-

-

(1,170)

-

-

-

(1,170)

-

(1,170)

Net cash

received

from

related

party

under

counter

guarantee

agreement

-

-

-

-

-

-

379

379

-

379

Foreign

currency

translation

loss

-

-

-

-

-

(1,352)

-

(1,352)

Balance at

March31,660

$

15

$

3,655

$

108,001

$

20,376

$

3,238

$

(2,974)

$

132,311

-

$

132,311

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 (loss)

party

Company

Interest

equity

Balance at

January 1,

2020

14,801,770

$

15

$

3,640

$

106,328

$

19,939

$

(4,330)

$

(4,932)

$

120,660

(1,510)

$

119,150

Stock-based

compensation

3,062

-

5

-

-

-

-

5

-

5

Net income

(loss)

-

-

-

(2,701)

-

-

-

(2,701)

3

(2,698)

Net cash

received

from

related

party

under

counter

guarantee

agreement

-

-

-

-

-

-

785

785

-

785

Foreign

currency

translation

income

(loss)

-

-

-

-

-

(1,440)

-

(1,440)

3

(1,437)

Balance at

March31,832

$

15

$

3,645

$

103,627

$

19,939

$

(5,770)

$

(4,147)

$

117,309

(1,504)

$

115,805

EVER-GLORY INTERNATIONAL GROUP,INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands of U.S. Dollars,

2020

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$

(1,698)

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

Depreciation and amortization

1,377

1,587

Gain on disposal of intangible assets

-

(268)

Loss from sale of property and equipment

102

102

(Recovering from) Provision of bad debt allowance

(196)

278

Provision for obsolete inventories

3,583

4,204

Changes in fair value of trading securities

(262)

-

Changes in fair value of investment

28

-

Deferred income tax

17

104

Stock-based compensation

5

5

Changes in operating assets and liabilities

Accounts receivable

6,509

34,906

Inventories

6,805

10,303

Value added tax receivable

52

210

Other receivables and prepaid expenses

(367)

364

Advances on inventory purchases

2,544

2,855

Amounts due from related parties

(71)

142

Accounts payable

(14,690)

(19,864)

Accounts payable and other payables- related parties

(769)

(1,038)

Other payables and accrued liabilities

(3,221)

(5,587)

Value added and other taxes payable

(220)

(31)

Income tax payable

(358)

(1,019)

Net cash (used in) provided by operating activities

(302)

24,555

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment

(1,378)

(78)

Disposal of intangible assets

-

353

Purchases of trading securities

(1,238)

-

Proceeds from trading securities

255

-

Net cash (used in) provided by investing activities

(2,361)

275

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from bank loans

12,336

11,464

Repayment of bank loans

(6,168)

(14,884)

Net collection (advance) of amounts due from related party (equity)

148

748

Net cash provided by (used in) financing activities

6,316

(2,672)

EFFECT OF EXCHANGE RATE CHANGES ON CASH

(1,659)

1,497

NET INCREASE IN CASH,CASH EQUIVALENTS AND RESTRICTED CASH

1,993

23,655

CASH,CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF

PERIOD

121,723

48,551

CASH,CASH EQUIVALENTS AND RESTRICTED CASH AT END OF

PERIOD

$

123,716

$

72,206

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

consolidated balance sheets:

Cash and Cash Equivalents

78,056

70,036

Restricted cash

45,660

2,170

$

123,206

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:

Interest

$

492

$

341

Income taxes

$

729

$

1,218

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