Ever-Glory Fourth Quarter 2021 Financial Results

NEW YORK,April 13,2022 --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 full year endedDecember 31,2021.

Mr. Yihua Kang,Chairman,President and Chief Executive Officer of Ever-Glory,said,"During the full year of 2021,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 full year 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 137 stores during 2021,we operated a nationwide network of 880 stores as of December 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," Mr. Kang concluded.

Mr. Jason Jiansong Wang,Chief Financial Officer of Ever-Glory,added,"The full yearresults are 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."

Fullyear 2021 Financial Results

Total salesfor the full year of 2021were $331.0million,anincrease of 23.8% from $267.4 million in the full yearof 2020. This increase was primarily driven by a57.8% increase in our wholesale businesspartially offset bya2.7% decrease in retailbusiness.

Sales for the Company's branded fashion apparel retail division decreased by 2.7% to $146.1 million for the full yearof 2021,compared with $150.1 million for the full yearof 2020. This decrease was primarily due to a decrease in same store sales.The Company operated 880retail stores as of December 31,2021,compared with 936retail stores as of December 31,2020.

Sales for the Company's wholesale divisionincreased by 57.8% to $184.9 million for the full year of 2021,compared with$117.2 million for the full yearof 2020.This increase was primarily attributable to increased sales in Mainland China,Hong Kong China,Europe-Other,Japan and United States.

Total gross profit for the full yearof 2021increase by10.7% to $101.0 million,compared with $91.2 million for tthe full yearof 2020. Total gross marginfor the full yearof 2021 decreased to 30.5% from 34.1% for the full yearof 2020.

Gross profit for the retail businessincrease by 3.6% to $63.7million for the full yearof 2021,compared with $61.5million for the full yearof 2020. Gross margin for the full yearof 2021 was 43.6% compared to 40.9% for the full yearof 2020.

Gross profit for the wholesale businessincreased by 25.4% to $37.3 million for the full yearof 2021,compared with $29.7 million for the full yearof 2020. Gross margin for the full yearof 2021 decreased to 20.2% from 25.4% for the full yearof 2020.

Selling expensesfor the full yearof 2021increased by 12.8% to $63.1 million,or 19.1% of total sales,compared with $55.9 million,or 20.9% of total sales for the full year of 2020. The increase was attributable to the higher travelling expenses.

General and administrative expensesfor the full yearof 2021increased by23.2% to $38.4 million,or 11.6% of total sales,compared with $31.2 million,or 11.7% of total sales for the full year of 2020. The increase was attributable tothe increased salaries.

(Loss) Income from operationswas ($0.5 million) for the full yearof 2021,compared to $4.1 million for the full year of 2020.

Net loss attributableto the Companyfor the full yearof 2021was ($0.09 million )compared with 3.3million for the full yearof 2020. Basic and diluted lossper share were ($0.01) for the full yearof 2021compared with $0.22 for the full yearof 2020.

Balance Sheet

As of December 31,Ever-Glory had approximately $56.6 million of cash and cash equivalents,compared with approximately $81.9million as of December 31,2020. Ever-Glory had working capital of approximately $51.0 millionas of December 31,and outstanding bank loans of approximately $69.0 million as ofDecember 31,2021.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on April 13,2022(8:00 p.m. Beijing Time on April 13,2022). Listeners can access the conference call by dialing +1-800-239-9838or +1-323-794-2551and using the access code 1990321. 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 April 13through 11:59 p.m. Eastern Time on April 20by calling +1-844-512-2921 or +1-412-317-6671 with pin number 1990321.

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","idole" and "Jizhu". 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

Huilin Hua

Tel: +86-25-52096859

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

EVER-GLORY INTERNATIONAL GROUP,INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

AS OF DECEMBER 31,2021AND 2020

December31,

2021

December31,

2020

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

56,573

$

81,865

Restricted cash

40,768

39,858

Trading securities

3,251

1,792

Accounts receivable,net

69,859

53,285

Inventories

63,841

53,893

Advances on inventory purchases

8,179

10,261

Value added tax receivable

1,693

1,244

Other receivables and prepaid expenses

6,345

5,479

Amounts due from related parties

220

567

Total Current Assets

250,729

248,244

NON-CURRENT ASSETS

Equity security investment

5,682

3,932

Intangible assets,net

4,794

4,794

Property and equipment,net

36,340

32,164

Operating lease right-of-use assets

50,077

41,690

Deferred tax assets

899

902

Other non-current assets

784

-

Total Non-Current Assets

98,576

83,482

TOTAL ASSETS

$

349,305

$

331,726

LIABILITIES AND STOCKHOLDERS'EQUITY

CURRENT LIABILITIES

Bank loans

$

68,992

$

65,919

Accounts payable

67,930

67,762

Accounts payable and other payables – related parties

1,332

3,764

Other payables and accrued liabilities

18,531

16,073

Value added and other taxes payable

999

909

Income tax payable

334

1,062

Current operating lease liabilities

41,633

33,481

Total Current Liabilities

199,751

188,970

NON-CURRENT LIABILITIES

Non-current operating lease liabilities

8,596

8,307

TOTAL LIABILITIES

208,347

197,277

COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS' EQUITY

Common stock ($0.001 par value,authorized 50,000,000 shares,14,812,312 and

14,809,160 shares issued and outstanding as of December 30,2021 and

December 31,2020,respectively)

15

15

Additional paid-in capital

3,660

3,650

Retained earnings

108,210

109,171

Statutory reserve

21,245

20,376

Treasury stock (as cost,147,334 shares at December 30,2021)

(363)

-

Accumulated other comprehensive income

8,191

4,590

Amounts due from related party

(3,353)

Total equity

140,958

134,449

TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY

$

349,726

EVER-GLORY INTERNATIONAL GROUP,INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

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

FOR THE YEARS ENDED DECEMBER 31,2021AND 2020

2021

2020

NET SALES

$

330,978

$

267,354

COST OF SALES

230,026

176,141

GROSS PROFIT

100,952

91,213

OPERATING EXPENSES

Selling expenses

63,074

55,894

General and administrative expenses

38,416

31,176

Total operating expenses

101,490

87,070

(LOSS) INCOME FROM OPERATIONS

(538)

4,143

OTHER INCOME (EXPENSE)

Interest income

976

1,014

Interest expense

(2,391)

(2,345)

Government subsidy

1,163

1,235

Gain (loss) from changes in fair values of investments

1,791

(135)

Other income

1,852

1,830

Total Other Income,Net

3,391

1,599

INCOME BEFORE INCOME TAX EXPENSE

2,853

5,742

INCOME TAX EXPENSE

(2,945)

(2,469)

(LOSS)NET INCOME

(92)

3,273

Net loss attributable to the non-controlling interest

-

7

NET INCOME ATTRIBUTABLE TO THE COMPANY

$

(92)

$

3,280

(LOSS)NET INCOME

$

(92)

$

3,273

Foreign currency translation gain

3,601

8,920

COMPREHENSIVE INCOME

$

3,509

$

12,193

Comprehensive income attributable to the noncontrolling interest

-

7

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY

$

3,200

(LOSS)EARNINGS PER SHARE ATTRIBUTABLE TO THE COMPANY'S

STOCKHOLDERS:

Basic and diluted

$

(0.01)

$

0.22

Weighted average number of shares outstanding Basic and diluted

14,811,020

14,806,778

EVER-GLORY INTERNATIONAL GROUP,INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

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

FOR THE YEARSENDED DECEMBER 31,2021AND 2020

Additional

Retained Earnings

Accumulated

other

Amounts

due

from

Total

equity

attributable

to stockholders

Non-

Common Stock

paid-in

Treasury

Stock

Statutory

Comprehensive

related

of the

controlling

Total

Shares

Amount

capital

Unrestricted

reserve

income

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 issued for

compensation

7,390

-

10

-

-

-

-

-

10

10

Net income

(loss)

-

-

-

-

3,280

-

-

-

3,280

(7)

3,273

Transfer to

reserve

-

-

-

-

(437)

437

-

-

-

-

Net cash paid to

related party

under counter

guarantee

agreement

(Note 11)

-

-

-

-

-

-

-

1,579

1,579

-

1,579

Deconsolidation

of Yiduo

-

-

-

-

-

-

-

-

-

1,517

1,517

Foreign

currency

translation

gain

8,920

8,920

-

8,920

Balance at

December

31,2020

14,160

$

15

$

3,650

$

-

$

109,171

$

20,376

$

4,590

$

(3,353)

$

134,449

$

-

$

134,449

Stock issued for

compensation

3,152

-

10

-

-

-

-

-

10

10

Net income

(loss)

-

-

-

-

(92)

-

-

-

(92)

-

(92)

Transfer to

reserve

-

-

-

-

(869)

869

-

-

-

-

Payments

received

from party

under counter

guarantee

agreement

(Note 11)

-

-

-

-

-

-

-

3,353

3,353

-

3,353

Repurchaseof

147,334

shares of

common

stock

-

-

-

(363)

-

-

-

(363)

-

(363)

Foreign

currency

translation

gain

3,601

-

3,601

Balance at

December

31,2021

14,312

$

15

$

3,660

$

(363)

$

108,210

$

21,245

$

8,191

$

-

$

140,958

$

-

$

140,958

EVER-GLORY INTERNATIONAL GROUP,INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. Dollars,2021AND 2020

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

$

(92)

3,273

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

Depreciation and amortization

6,404

5,291

Loss from sale of property and equipment

610

209

Loss on deconsolidation of a subsidiary

-

1,085

Provision of bad debt allowance

1,429

1,117

Provision for obsolete inventories

6,735

6,753

Changes in fair value of trading securities

(150)

(131)

Changes in fair value of investment

(1,641)

(819)

Deferred income tax

24

154)

Stock-based compensation

10

10

Changes in operating assets and liabilities

Accounts receivable

(16,737)

27,173

Inventories

(15,483)

10,161

Value added tax receivable

(416)

1,336

Other receivables and prepaid expenses

(710)

(135)

Advances on inventory purchases

2,418

(28)

Amounts due from related parties

3,563

(480)

Accounts payable

(2,238)

(9,316)

Accounts payable and other payables- related parties

(3,142)

(1,145)

Other payables and accrued liabilities

3,083

(3,098)

Value added and other taxes payable

71

(806)

Income tax payable

(747)

(148)

Net cash(used in) provided by operating activities

(17,009)

40,456

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment

(10,123)

(6,354)

Net purchase of trading securities

(1,309)

(1,665)

Investment payment

(775)

(2,936)

Net cash used in investing activities

(12,207)

(10,955)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from bank loans

73,340

90,729

Repayment of bank loans

(71,790)

(58,658)

Repurchase of common stock

363

-

Net collection of amounts due from related party (equity)

863

1,848

Net cash provided by financing activities

2,776

33,919

EFFECT OF EXCHANGE RATE CHANGES ON CASH

2,058

7,548

NET INCREASE IN CASH,CASH EQUIVALENTS AND RESTRICTED CASH

(24,382)

70,968

CASH,CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF

PERIOD

121,723

50,755

CASH,CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

$

97,341

$

121,723

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

balance sheets:

Cash and Cash Equivalents

56,573

81,858

$

97,723

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Net asset (liabilities) derecognized due to deconsolidation of a subsidiary

-

$

1,164

Cash paid during the period for:

Interest

$

2,391

$

2,345

Income taxes

$

2,945

$

2,469

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