Ever-Glory Reports Second Quarter 2021 Financial Results

NEW YORK,Aug. 13,2021 --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 secondquarter endedJune 30,2021.

Mr. Yihua Kang,Chairman,President and Chief Executive Officer of Ever-Glory,said,"During the second 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 second 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 66 stores during 2021,we operated a nationwide network of 931 stores as of June 30,2021."

"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," Mr. Kang concluded.

Mr. Jason Jiansong Wang,Chief Financial Officer of Ever-Glory,added,"The secondquarter resultsare coupled with our ability to increase operating leverage. Going forward,we remain confidence 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."

SecondQuarter 2021Financial Results

Total salesfor the second quarter of 2021were $60.6million,anincrease of 20.9% from $50.1 million in the second quarter of 2020. This increase was primarily driven by a19.9% increase in our wholesale businessanda 21.7% increase in retailbusiness.

Sales for the Company's branded fashion apparel retail division increased by 21.7% to $34.1 million for the second quarter of 2021,compared with $28.0 million for the secondquarter of 2020. This increase was primarily due to the increase in same-store sales. The Company operated 931retail stores as of June 30,2021,compared with 935retail stores as of June 30,2020.

Sales for the Company's wholesale divisionincreased by 19.9% to $26.4 million for the secondquarter of 2021,compared with$22.0 million for the secondquarter 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 secondquarter of 2021increased by27.3% to $18.4 million,compared with $14.4 million for the secondquarter of 2020. Total gross marginfor the second quarter of 2021increased to 30.4% from 28.8% for the secondquarter of 2020.

Gross profit for the retail businessincreased by 46.7% to $14.8million for the secondquarter of 2021,compared with $10.1million for the secondquarter of 2020. Gross margin for the second quarter of 2021 was 43.4%compared to 36.2% for the secondquarter of 2020.

Gross profit for the wholesale businessdecreased by 17.5% to $3.6million for the secondquarterof 2021,compared with $4.4million for the secondquarter of 2020. Gross marginfor the second quarter of 2021decreased to 13.6% from 19.7% for the secondquarter of 2020.

Selling expensesfor the secondquarterof 2021increased by 14.9% to $14.5million,or 24.0% of total sales,compared with $12.6million,or 25.2% of total sales for the secondquarter of 2020. The increase was attributable to the increased marketing expenses associated with the promotion of the retail brand.

General and administrative expensesfor the secondquarterof 2021increased by 28.3% to $7.7million,or 12.7% of total sales,compared with $6.0million,or 11.9% of total sales for the secondquarter of 2020.The increase was attributable to the decreased business trip and the exemption of social benefits by the PRC government during the COVID-19 outbreak in China 2020.

Loss from operationswas $3.7 million for the second quarter of 2021,compared to $4.2 million for the second quarter of 2020.

Net loss attributableto the Companyfor the secondquarter of 2021was $1.8million compared with $3.8million for the secondquarter of 2020. Basic and diluted lossper share were $0.12for the secondquarter of 2021compared with $0.26for the secondquarter of 2020.

Balance Sheet

As of June 30,Ever-Glory had approximately $64.0 million of cash and cash equivalents,compared with approximately $81.9million as of December 31,2020. Ever-Glory had working capital of approximately $48.9 million as of June 30,and outstanding bank loans of approximately $65.5million as ofJune 30,2021.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on August 13,2021(8:00 p.m. Beijing Time on August 13,2021). Listeners can access the conference call by dialing +1-800-263-0877or + 1-646-828-8143and using the access code 2633372. 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 August 13through 11:59 p.m. Eastern Time on August 20by calling +1-844-512-2921 or +1-412-317-6671 with pin number 2633372.

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)

June30,

2021

December31,

2020

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

63,963

$

81,865

Restricted cash

42,725

39,858

Trading securities

3,581

1,792

Accounts receivable,net

39,643

53,285

Inventories

60,190

53,893

Advances on inventory purchases

7,556

10,261

Value added tax receivable

2,114

1,244

Other receivables and prepaid expenses

6,255

5,479

Amounts due from related parties

186

567

Total Current Assets

226,213

248,244

NON-CURRENT ASSETS

Equity security investment

5,929

3,932

Intangible assets,net

4,750

4,794

Property and equipment,net

33,414

32,164

Operating lease right-of-use assets

49,725

41,690

Deferred tax assets

306

902

Total Non-Current Assets

94,124

83,482

TOTAL ASSETS

$

320,337

$

331,726

LIABILITIES AND STOCKHOLDERS'EQUITY

CURRENT LIABILITIES

Bank loans

$

65,498

$

65,919

Accounts payable

52,595

67,762

Accounts payable and other payables – related parties

2,131

3,764

Other payables and accrued liabilities

15,410

16,073

Value added and other taxes payable

-

909

Income tax payable

493

1,062

Current operating lease liabilities

41,174

33,481

Total Current Liabilities

177,301

188,970

NON-CURRENT LIABILITIES

Non-current operating lease liabilities

8,676

8,307

TOTAL LIABILITIES

185,977

197,277

COMMITMENTS AND CONTINGENCIES (Note 9)

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 June 30,2021 and December 31,

2020,respectively)

15

15

Additional paid-in capital

3,655

3,650

Retained earnings

106,230

109,171

Statutory reserve

20,376

20,376

Accumulated other comprehensive income

6,672

4,590

Amounts due from related party

(2,588)

(3,353)

Total equity

134,360

134,449

TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY

$

320,726

EVER-GLORY INTERNATIONAL GROUP,INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited)

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

Threemonths ended

Six months ended

June 30,

June 30,

2021

2020

2021

2020

NET SALES

$

60,555

$

50,086

$

131,369

$

108,441

COST OF SALES

42,163

35,641

90,541

77,958

GROSS PROFIT

18,392

14,445

40,828

30,483

OPERATING EXPENSES

Selling expenses

14,503

12,626

30,052

26,105

General and administrative expenses

7,662

5,971

15,513

11,755

Total Operating Expenses

22,165

18,597

45,565

37,860

LOSS FROM OPERATIONS

(3,773)

(4,152)

(4,737)

(7,377)

OTHER INCOME (EXPENSES)

Interest income

527

339

752

616

Interest expense

(200)

(566)

(692)

(907)

Government subsidy

243

231

502

691

Gain from changes in fair values of investments

2,041

4

2,275

4

Other income

477

610

774

968

Total Other Income,Net

3,088

618

3,611

1,372

LOSS BEFORE INCOME TAX EXPENSE

(685)

(3,534)

(1,126)

(6,005)

Income tax expense

(1,086)

(266)

(1,815)

(493)

NET LOSS

(1,771)

(3,800)

(2,941)

(6,498)

Net loss attributable to the non-controlling interest

-

6

-

3

NET LOSS ATTRIBUTABLE TO THE COMPANY

(1,794)

(2,495)

NET LOSS

$

(1,771)

$

(3,800)

$

(2,941)

$

(6,498)

Foreign currency translation gain (loss)

3,434

(263)

2,083

(1,700)

COMPREHENSIVE INCOME (LOSS)

1,663

(4,063)

(858)

(8,198)

Comprehensive loss attributable to the non-controlling

interest

-

8

-

2

COMPREHENSIVE

INCOME (LOSS)ATTRIBUTABLE TO THE

COMPANY

$

1,663

$

(4,055)

$

(858)

$

(8,196)

LOSS PER SHARE ATTRIBUTABLE TO THE

COMPANY'S STOCKHOLDERS

Basic and diluted

$

(0.12)

$

(0.26)

$

(0.20)

$

(0.44)

Weighted average number of shares outstanding Basic

and diluted

14,660

14,804,832

14,330

14,595

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)

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

loss

party

Company

Interest

equity

BalanceatJanuary 1,

2021

14,160

$

15

$

3,650

$

109,171

$

20,376

$

4,590

$

(3,353)

$

134,449

-

$

134,449

Stock issued

forcompensation

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

adjustment

(1,352)

-

(1,352)

Balance at March 31,660

15

3,655

108,001

20,376

3,238

(2,974)

132,311

-

132,311

Net income

-

-

-

(1,771)

-

-

-

(1,771)

-

(1,771)

Net cash received

from related party

under counter

guarantee

agreement

-

-

-

-

-

-

386

386

-

386

Foreign currency

translation

adjustment

-

-

-

-

-

3,434

3,434

-

3,434

Balance at June 30,660

$

15

$

3,655

$

106,230

$

20,376

$

6,672

$

(2,588)

$

134,360

-

$

134,360

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

loss

party

Company

Interest

equity

BalanceatJanuary 1,

2020

14,801,770

$

15

$

3,640

$

106,328

$

19,939

$

(4,330)

$

(4,932)

$

120,660

(1,510)

$

119,150

Stock issued

forcompensation

3,062

0.003

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

adjustment

(1,440)

-

(1,440)

3

(1,437)

Balance at March 31,832

15

3,645

103,627

19,939

(5,770)

(4,147)

117,309

(1,504)

115,805

Net (loss)

(3,794)

(3,794)

(6)

(3,800)

Net cash received

from related party

under counter

guarantee

agreement

151

151

151

Foreign currency

translation

adjustment

(261)

(261)

(2)

(263)

Balance at June 30,832

$

15

$

3,645

$

99,833

$

19,939

$

(6,031)

$

(3,996)

$

113,405

(1,512)

$

111,893

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)

Six Months Ended

June 30,

2021

June 30,

2020

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$

(2,498)

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

Depreciation and amortization

3,212

3,597

Loss from sale of property and equipment

463

189

Provision of bad debt allowance

652

969

Write off obsolete inventories

5,530

3,681

Changes in fair value of investment

(2,275)

-

Deferred income tax

604

71

Stock-based compensation

5

5

Changes in operating assets and liabilities

Accounts receivable

13,433

30,444

Inventories

(11,346)

11,659

Value added tax receivable

(562)

1,076

Other receivables and prepaid expenses

(632)

737

Advances on inventory purchases

2,928

3,845

Amounts due from related parties

546

(214)

Accounts payable

(17,753)

(22,522)

Accounts payable and other payables- related parties

(1,763)

(466)

Other payables and accrued liabilities

1,201

(7,027)

Value added and other taxes payable

(1,209)

(1,593)

Income tax payable

(581)

(910)

Net cash (used in) provided by operating activities

(10,488)

17,043

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment

(4,452)

(1,018)

Net (purchase) sale of trading securities

(1,468)

(825)

Net cash (used in) investing activities

(5,920)

(1,843)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from bank loans

12,841

31,995

Repayment of bank loans

(13,905)

(21,173)

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

798

898

Net cash (used in) provided by financing activities

(266)

11,720

EFFECT OF EXCHANGE RATE CHANGES ON CASH

1,639

(723)

NET (DECREASE) INCREASE IN CASH,CASH EQUIVALENTS AND

RESTRICTED CASH

(15,035)

26,197

CASH,CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF

PERIOD

121,723

50,755

CASH,CASH EQUIVALENTS AND RESTRICTED CASH AT END OF

PERIOD

$

106,688

$

76,952

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

consolidated balance sheets:

Cash and Cash Equivalents

63,963

59,236

Restricted cash

42,725

17,716

$

106,952

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:

Interest

$

692

$

907

Income taxes

$

1,781

$

493

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