QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Florida | 65-0420146 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | Accelerated filer | |||
Non-accelerated filer | Smaller reporting company | x |
Restate the Financial Statements; |
· | ||
sections in Item | ||
· |
the unaudited interim condensed consolidated Financial |
· |
· | Re-execute the certificates required by Section 302 of the Sarbanes-Oxley Act of 2002. |
AS OF SEPTEMBER 30, 2009 (UNAUDITED) AND DECEMBER 31, 2008 |
ASSETS | ||||||||
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
(unaudited) | ||||||||
(as restated, Note 1) | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 3,561,116 | $ | 1,445,363 | ||||
Accounts receivable | 14,590,133 | 9,485,338 | ||||||
Inventories | 7,232,455 | 3,735,227 | ||||||
Value added tax receivable | 802,120 | - | ||||||
Other receivables and prepaid expenses | 480,667 | 945,191 | ||||||
Advances on inventory purchases | 381,850 | 288,256 | ||||||
Amounts due from related party | 10,475,672 | 11,565,574 | ||||||
Total Current Assets | 37,524,013 | 27,464,949 | ||||||
LAND USE RIGHT, NET | 2,805,175 | 2,854,508 | ||||||
PROPERTY AND EQUIPMENT, NET | 12,574,798 | 12,494,452 | ||||||
INVESTMENT AT COST | 1,467,000 | 1,467,000 | ||||||
TOTAL ASSETS | $ | 54,370,986 | $ | 44,280,909 | ||||
LIABILITIES AND EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Bank loans | $ | 5,398,560 | $ | 6,542,820 | ||||
Loan from related party -short term | 500,000 | |||||||
Accounts payable | 9,682,539 | 3,620,543 | ||||||
Accounts payable and other payables- related parties | 739,437 | 754,589 | ||||||
Other payables and accrued liabilities | 1,943,983 | 1,683,977 | ||||||
Value added and other taxes payable | 371,655 | 368,807 | ||||||
Income tax payable | 118,921 | 257,946 | ||||||
Deferred tax liabilities | 304,670 | 80,009 | ||||||
Total Current Liabilities | 19,059,765 | 13,308,691 | ||||||
LONG-TERM LIABILITIES | ||||||||
Loan from related party | 2,247,879 | 2,660,085 | ||||||
Derivative liability | 1,207,000 | |||||||
Total Long-term Liabilities | 3,454,879 | 2,660,085 | ||||||
TOTAL LIABILITIES | 22,514,644 | 15,968,776 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
EQUITY | ||||||||
Stockholders' equity of the Company | ||||||||
Preferred stock ($.001 par value, authorized 5,000,000 shares, | ||||||||
no shares issued and outstanding) | - | - | ||||||
Common stock ($.001 par value, authorized 50,000,000 shares, | ||||||||
13,560,240 and 12,373,567 shares issued and outstanding | ||||||||
as of September 30,2009 and December 31, 2008, respectively) | 13,560 | 12,374 | ||||||
Additional paid-in capital | 3,616,971 | 4,549,004 | ||||||
Retained earnings | 20,310,793 | 15,807,539 | ||||||
Statutory reserve | 3,437,379 | 3,437,379 | ||||||
Accumulated other comprehensive income | 3,919,913 | 3,956,860 | ||||||
Total Stockholders' Equity of the Company | 31,298,616 | 27,763,156 | ||||||
Noncontrolling interest | 557,726 | 548,977 | ||||||
Total Equity | 31,856,342 | 28,312,133 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 54,370,986 | $ | 44,280,909 |
EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSDIARIES | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (UNAUDITED) |
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||||||
(as restated, Note 1) | (as restated, Note 1) | ||||||||||||||||
NET SALES | |||||||||||||||||
Related parties | $ | 66,221 | $ | 17,582 | $ | 75,572 | $ | 510,145 | |||||||||
Third parties | 24,870,500 | 31,867,994 | 66,494,465 | 75,191,036 | |||||||||||||
Total net sales | 24,936,721 | 31,885,576 | 66,570,037 | 75,701,181 | |||||||||||||
COST OF SALES | |||||||||||||||||
Related parties | 38,281 | 10,989 | 47,294 | 472,373 | |||||||||||||
Third parties | 20,264,735 | 27,284,216 | 52,667,322 | 62,563,564 | |||||||||||||
Total cost of sales | 20,303,016 | 27,295,205 | 52,714,616 | 63,035,937 | |||||||||||||
GROSS PROFIT | 4,633,705 | 4,590,371 | 13,855,421 | 12,665,244 | |||||||||||||
OPERATING EXPENSES | |||||||||||||||||
Selling expenses | 1,097,840 | 563,971 | 2,903,655 | 1,210,063 | |||||||||||||
General and administrative expenses | 1,562,382 | 1,683,713 | 5,707,786 | 4,918,696 | |||||||||||||
Total Operating Expenses | 2,660,222 | 2,247,684 | 8,611,441 | 6,128,759 | |||||||||||||
INCOME FROM OPERATIONS | 1,973,483 | 2,342,687 | 5,243,980 | 6,536,485 | |||||||||||||
OTHER INCOME (EXPENSES) | |||||||||||||||||
Interest income | 180,089 | 41,052 | 445,117 | 121,616 | |||||||||||||
Interest expense | (94,016 | ) | (1,468,592 | ) | (332,900 | ) | (2,677,546 | ) | |||||||||
Change of fair value of derivitive liability | (143,000 | ) | (725,000 | ) | |||||||||||||
Other income | 269 | 571 | 45,252 | 53,656 | |||||||||||||
Total Other Income (Expenses) | (56,658 | ) | (1,426,969 | ) | (567,531 | ) | (2,502,274 | ) | |||||||||
INCOME BEFORE INCOME TAX EXPENSE | 1,916,825 | 915,718 | 4,676,449 | 4,034,211 | |||||||||||||
INCOME TAX EXPENSE | (130,479 | ) | (273,203 | ) | (692,206 | ) | (841,850 | ) | |||||||||
NET INCOME | 1,786,346 | 642,515 | 3,984,243 | 3,192,361 | |||||||||||||
ADD: NET LOSS ATTRIBUTABLE TO THE NONCONTROLING INTEREST | 7,552 | 4,666 | 25,011 | 1,417 | |||||||||||||
NET INCOME ATTRIBUTABLE TO THE COMPANY | $ | 1,793,898 | $ | 647,181 | $ | 4,009,254 | $ | 3,193,778 | |||||||||
NET INCOME | $ | 1,786,346 | $ | 642,515 | $ | 3,984,243 | $ | 3,192,361 | |||||||||
Foreign currency translation gain (loss) | 46,364 | 107,468 | (36,947 | ) | 1,818,706 | ||||||||||||
COMPREHENSIVE INCOME | 1,832,710 | 749,983 | 3,947,296 | 5,011,067 | |||||||||||||
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO | |||||||||||||||||
THE NONCONTROLING INTEREST | (6,752 | ) | 34,441 | 8,749 | 11,419 | ||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO | |||||||||||||||||
THE COMPANY | $ | 1,825,958 | $ | 784,424 | $ | 3,956,045 | $ | 5,022,486 | |||||||||
NET INCOME PER SHARE | |||||||||||||||||
Attributable to the Company's common stockholders | |||||||||||||||||
Basic | $ | 0.13 | $ | 0.05 | $ | 0.30 | $ | 0.27 | |||||||||
Diluted | $ | 0.13 | $ | 0.05 | $ | 0.30 | $ | 0.27 | |||||||||
Weighted average number of shares outstanding | |||||||||||||||||
Basic | 13,558,326 | 11,914,825 | 13,546,116 | 11,692,604 | |||||||||||||
Diluted | 13,558,326 | 12,002,908 | 13,546,116 | 11,715,332 |
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 3,561,116 | $ | 1,445,363 | ||||
Accounts receivable | 14,590,133 | 9,485,338 | ||||||
Inventories | 7,232,455 | 3,735,227 | ||||||
Value added tax receivable | 802,120 | - | ||||||
Other receivables and prepaid expenses | 480,667 | 945,191 | ||||||
Advances on inventory purchases | 381,850 | 288,256 | ||||||
Amounts due from related party | 10,475,672 | 11,565,574 | ||||||
Total Current Assets | 37,524,013 | 27,464,949 | ||||||
LAND USE RIGHT, NET | 2,805,175 | 2,854,508 | ||||||
PROPERTY AND EQUIPMENT, NET | 12,574,798 | 12,494,452 | ||||||
INVESTMENT AT COST | 1,467,000 | 1,467,000 | ||||||
TOTAL ASSETS | $ | 54,370,986 | $ | 44,280,909 | ||||
LIABILITIES AND EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Bank loans | $ | 5,398,560 | $ | 6,542,820 | ||||
Loan from related party -short term | 500,000 | |||||||
Accounts payable | 9,682,539 | 3,620,543 | ||||||
Accounts payable and other payables- related parties | 739,437 | 754,589 | ||||||
Other payables and accrued liabilities | 1,943,983 | 1,683,977 | ||||||
Value added and other taxes payable | 371,655 | 368,807 | ||||||
Income tax payable | 118,921 | 257,946 | ||||||
Deferred tax liabilities | 304,670 | 80,009 | ||||||
Total Current Liabilities | 19,059,765 | 13,308,691 | ||||||
LONG-TERM LIABILITIES | ||||||||
Loan from related party | 2,247,879 | 2,660,085 | ||||||
TOTAL LIABILITIES | 21,307,644 | 15,968,776 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
EQUITY | ||||||||
Stockholders' equity of the Company | ||||||||
Preferred stock ($.001 par value, authorized 5,000,000 shares, | ||||||||
no shares issued and outstanding) | - | - | ||||||
Common stock ($.001 par value, authorized 50,000,000 shares, | ||||||||
13,560,240 and 12,373,567 shares issued and outstanding | ||||||||
as of September 30,2009 and December 31, 2008, respectively) | 13,560 | 12,374 | ||||||
Additional paid-in capital | 4,592,971 | 4,549,004 | ||||||
Retained earnings | 20,541,793 | 15,807,539 | ||||||
Statutory reserve | 3,437,379 | 3,437,379 | ||||||
Accumulated other comprehensive income | 3,919,913 | 3,956,860 | ||||||
Total Stockholders' Equity of the Company | 32,505,616 | 27,763,156 | ||||||
Noncontrolling interest | 557,726 | 548,977 | ||||||
Total Equity | 33,063,342 | 28,312,133 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 54,370,986 | $ | 44,280,909 |
EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (UNAUDITED) |
2009 | 2008 | |||||||
(as restated, Note 1) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | $ | 3,984,243 | $ | 3,192,361 | ||||
Adjustments to reconcile net income to cash provided | ||||||||
by operating activities: | ||||||||
Depreciation and amortization | 1,512,089 | 714,446 | ||||||
Change in fair value of derivative liability | 725,000 | |||||||
Deferred income tax | 224,493 | |||||||
Amortization of discount on convertible notes | 1,934,026 | |||||||
Amortization of deferred financing costs | 318,196 | |||||||
Stock issued for interest | 2,155 | |||||||
Stock-based compensation | 22,181 | 12,855 | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | (5,100,967 | ) | (3,306,125 | ) | ||||
Accounts receivable - related parties | 153,420 | |||||||
Inventories | (3,494,605 | ) | (597,330 | ) | ||||
Value added tax receivable | (801,519 | ) | ||||||
Other receivables and prepaid expenses | (123,094 | ) | (631,466 | ) | ||||
Other receivable - related parties | (37,823 | ) | ||||||
Advances on inventory purchases | (93,524 | ) | (332,988 | ) | ||||
Amounts due from related party | 1,088,634 | (4,059,141 | ) | |||||
Accounts payable | 6,057,452 | 4,325,070 | ||||||
Accounts payable and other payables - related parties | 72,399 | �� | 149,688 | |||||
Other payables and accrued liabilities | 259,657 | 435,963 | ||||||
Value added and other taxes payable | 2,845 | 181,056 | ||||||
Income tax payable | (138,920 | ) | 268,334 | |||||
Net cash provided by operating activities | 4,196,364 | 2,722,697 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Investment in La Chapelle | (1,397,700 | ) | ||||||
Purchase of property and equipment | (984,346 | ) | (800,669 | ) | ||||
Proceeds from sale of equipment | 28,537 | 37,019 | ||||||
Net cash used in investing activities | (955,809 | ) | (2,161,350 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Contribution from minority shareholders | 553,040 | |||||||
Proceeds from bank loans | 11,991,062 | 11,354,904 | ||||||
Repayment of bank loans | (13,134,464 | ) | (10,695,402 | ) | ||||
Repayment of long term loan | (1,844,164 | ) | ||||||
Exercise of warrants | 219,635 | |||||||
Net cash used in financing activities | (1,143,402 | ) | (411,987 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 18,600 | 91,449 | ||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 2,115,753 | 240,809 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 1,445,363 | 641,739 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 3,561,116 | $ | 882,548 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid during the period for: | ||||||||
Interest expense | $ | 245,105 | $ | 295,562 | ||||
Income taxes | $ | 606,622 | $ | 573,557 |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
NET SALES | ||||||||||||||||
Related parties | $ | 66,221 | $ | 17,582 | $ | 75,572 | $ | 510,145 | ||||||||
Third parties | 24,870,500 | 31,867,994 | 66,494,465 | 75,191,036 | ||||||||||||
Total net sales | 24,936,721 | 31,885,576 | 66,570,037 | 75,701,181 | ||||||||||||
COST OF SALES | ||||||||||||||||
Related parties | 38,281 | 10,989 | 47,294 | 472,373 | ||||||||||||
Third parties | 20,264,735 | 27,284,216 | 52,667,322 | 62,563,564 | ||||||||||||
Total cost of sales | 20,303,016 | 27,295,205 | 52,714,616 | 63,035,937 | ||||||||||||
GROSS PROFIT | 4,633,705 | 4,590,371 | 13,855,421 | 12,665,244 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Selling expenses | 1,097,840 | 563,971 | 2,903,655 | 1,210,063 | ||||||||||||
General and administrative expenses | 1,562,382 | 1,683,713 | 5,707,786 | 4,918,696 | ||||||||||||
Total Operating Expenses | 2,660,222 | 2,247,684 | 8,611,441 | 6,128,759 | ||||||||||||
INCOME FROM OPERATIONS | 1,973,483 | 2,342,687 | 5,243,980 | 6,536,485 | ||||||||||||
OTHER INCOME (EXPENSES) | ||||||||||||||||
Interest income | 180,089 | 41,052 | 445,117 | 121,616 | ||||||||||||
Interest expense | (94,016 | ) | (1,468,592 | ) | (332,900 | ) | (2,677,546 | ) | ||||||||
Other income | 269 | 571 | 45,252 | 53,656 | ||||||||||||
Total Other Income (Expenses) | 86,342 | (1,426,969 | ) | 157,469 | (2,502,274 | ) | ||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 2,059,825 | 915,718 | 5,401,449 | 4,034,211 | ||||||||||||
INCOME TAX EXPENSE | (130,479 | ) | (273,203 | ) | (692,206 | ) | (841,850 | ) | ||||||||
NET INCOME | 1,929,346 | 642,515 | 4,709,243 | 3,192,361 | ||||||||||||
ADD: NET LOSS ATTRIBUTABLE TO THE NONCONTROLING INTEREST | 7,552 | 4,666 | 25,011 | 1,417 | ||||||||||||
NET INCOME ATTRIBUTABLE TO THE COMPANY | $ | 1,936,898 | $ | 647,181 | $ | 4,734,254 | $ | 3,193,778 | ||||||||
NET INCOME | $ | 1,929,346 | $ | 642,515 | $ | 4,709,243 | $ | 3,192,361 | ||||||||
Foreign currency translation gain (loss) | 46,364 | 107,468 | (36,947 | ) | 1,818,706 | |||||||||||
COMPREHENSIVE INCOME | 1,975,710 | 749,983 | 4,672,296 | 5,011,067 | ||||||||||||
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO | ||||||||||||||||
THE NONCONTROLING INTEREST | (6,752 | ) | 34,441 | 8,749 | 11,419 | |||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO | ||||||||||||||||
THE COMPANY | $ | 1,968,958 | $ | 784,424 | $ | 4,681,045 | $ | 5,022,486 | ||||||||
NET INCOME PER SHARE | ||||||||||||||||
Attributable to the Company's common stockholders | ||||||||||||||||
Basic | $ | 0.14 | $ | 0.05 | $ | 0.35 | $ | 0.27 | ||||||||
Diluted | $ | 0.14 | $ | 0.05 | $ | 0.35 | $ | 0.27 | ||||||||
Weighted average number of shares outstanding | ||||||||||||||||
Basic | 13,558,326 | 11,914,825 | 13,546,116 | 11,692,604 | ||||||||||||
Diluted | 13,558,326 | 12,002,908 | 13,546,116 | 11,715,332 |
2009 | 2008 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | $ | 4,709,243 | $ | 3,192,361 | ||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
Depreciation and amortization | 1,512,089 | 714,446 | ||||||
Deferred income tax | 224,493 | |||||||
Amortization of discount on convertible notes | 1,934,026 | |||||||
Amortization of deferred financing costs | 318,196 | |||||||
Stock issued for interest | 2,155 | |||||||
Stock-based compensation | 22,181 | 12,855 | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | (5,100,967 | ) | (3,306,125 | ) | ||||
Accounts receivable - related parties | 153,420 | |||||||
Inventories | (3,494,605 | ) | (597,330 | ) | ||||
Value added tax receivable | (801,519 | ) | ||||||
Other receivables and prepaid expenses | (123,094 | ) | (631,466 | ) | ||||
Other receivable - related parties | (37,823 | ) | ||||||
Advances on inventory purchases | (93,524 | ) | (332,988 | ) | ||||
Amounts due from related party | 1,088,634 | (4,059,141 | ) | |||||
Accounts payable | 6,057,452 | 4,325,070 | ||||||
Accounts payable and other payables - related parties | 72,399 | 149,688 | ||||||
Other payables and accrued liabilities | 259,657 | 435,963 | ||||||
Value added and other taxes payable | 2,845 | 181,056 | ||||||
Income tax payable | (138,920 | ) | 268,334 | |||||
Net cash provided by operating activities | 4,196,364 | 2,722,697 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Investment in La Chapelle | (1,397,700 | ) | ||||||
Purchase of property and equipment | (984,346 | ) | (800,669 | ) | ||||
Proceeds from sale of equipment | 28,537 | 37,019 | ||||||
Net cash used in investing activities | (955,809 | ) | (2,161,350 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Contribution from minority shareholders | 553,040 | |||||||
Proceeds from bank loans | 11,991,062 | 11,354,904 | ||||||
Repayment of bank loans | (13,134,464 | ) | (10,695,402 | ) | ||||
Repayment of long term loan | (1,844,164 | ) | ||||||
Exercise of warrants | 219,635 | |||||||
Net cash used in financing activities | (1,143,402 | ) | (411,987 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 18,600 | 91,449 | ||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 2,115,753 | 240,809 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 1,445,363 | 641,739 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 3,561,116 | $ | 882,548 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid during the period for: | ||||||||
Interest expense | $ | 245,105 | $ | 295,562 | ||||
Income taxes | $ | 606,622 | $ | 573,557 |
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; |
Level 2 | Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; |
Level 3 | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
2009 | 2008 | |||||||
Raw materials | $ | 874,029 | $ | 328,607 | ||||
Work-in-progress | 3,090,625 | 342,303 | ||||||
Finished goods | 3,267,801 | 3,064,317 | ||||||
Total inventories | $ | 7,232,455 | $ | 3,735,227 |
2009 | 2008 | |||||||
Bank loan, interest rate at 0.4455% per month, | ||||||||
due December 31,2009 | $ | 2,640,600 | ||||||
Bank loan, interest rate at 0.4455% per month, | ||||||||
due January 14, 2010 | 1,467,000 | |||||||
Bank loan, interest rate at 0.4455% per month, | ||||||||
due March 11, 2010 | 1,026,900 | |||||||
Bank loan, interest rate at 0.4050% per month, due November 24,2009 | 264,060 | |||||||
Bank loan, interest rate at 0.60225% per month, | ||||||||
paid in full, February 2009 | $ | 5,809,320 | ||||||
Bank loan, interest rate at 0.48825% per month, | ||||||||
paid in full, April 2009 | 733,500 | |||||||
Total bank loans | $ | 5,398,560 | $ | 6,542,820 |
September 30, 2009 | January 1, 2009 | |||||||
Expected term | 3.68 years | 4.43 years | ||||||
Volatility | 111.24 | % | 100.20 | % | ||||
Risk-free interest rate | 2.4 | % | 1.5 | % | ||||
Dividend yield | 0 | % | 0 | % |
Three months ended | Nine months ended | Three months ended | Nine months ended | |||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |||||||||||||||||||||||||
PRC | $ | 880,545 | $ | 2,312,172 | $ | 4,271,595 | $ | 6,695,424 | $ | 880,545 | $ | 2,312,172 | $ | 4,271,595 | $ | 6,695,424 | ||||||||||||||||
Others | 1,179,280 | (1,396,454 | ) | 1,129,854 | (2,661,213 | ) | 1,179,280 | (1,396,454 | ) | 1,129,854 | (2,661,213 | ) | ||||||||||||||||||||
$ | 2,059,825 | $ | 915,718 | $ | 5,401,449 | $ | 4,034,211 | $ | 2,059,825 | $ | 915,718 | $ | 5,401,449 | $ | 4,034,211 |
a. | The new standard EIT rate of 25% replaces the 33% rate applicable to both DES and FIEs, except for High-Tech companies that pay a reduced rate of 15%; |
b. | Companies established before March 16, 2007 continue to enjoy tax holiday treatment approved by local governments for a grace period of either the next 5 years, or until the tax holiday term is completed, whichever is sooner. |
Goldenway | New- Tailun | Catch- Luck | LA GO GO | Ever-Glory Apparel | ||||||||||||||||
2008 | 25.0 | % | 12.5 | % | 12.5 | % | 25.0 | % | * | |||||||||||
2009 | 25.0 | % | 12.5 | % | 12.5 | % | 25.0 | % | 25.0 | % |
Goldenway | New-Tailun | Catch-Luck | LA GO GO | Ever-Glory Apparel | ||||||||||||||||
2008 | 25.0 | % | 12.5 | % | 12.5 | % | 25.0 | % | * | |||||||||||
2009 | 25.0 | % | 12.5 | % | 12.5 | % | 25.0 | % | 25.0 | % |
Three months ended | Nine months ended | Three months ended | Nine months ended | |||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |||||||||||||||||||||||||
PRC Statutory Rate | 25.0 | 25.0 | 25.0 | 25.0 | 25.0 | 25.0 | 25.0 | 25.0 | ||||||||||||||||||||||||
Income tax exemption | (9.1 | ) | (13.0 | ) | (11.0 | ) | (12.0 | ) | (9.1 | ) | (13.0 | ) | (11.0 | ) | (12.0 | ) | ||||||||||||||||
Other | (1.1 | ) | 2.2 | (1.1 | ) | 2.2 | ||||||||||||||||||||||||||
Effective income tax rate | 14.8 | % | 12.0 | % | 16.2 | % | 13.0 | % | 14.8 | % | 12.0 | % | 16.2 | % | 13.0 | % |
For the three months ended September 30 | For the nine months ended September 30 | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Current | $ | 58,504 | $ | 273,203 | $ | 467,713 | $ | 841,850 | ||||||||
Deferred | 71,975 | - | 224,493 | - | ||||||||||||
Income tax expense | $ | 130,479 | $ | 273,203 | $ | 692,206 | $ | 841,850 |
For the three months ended September 30 | For the nine months ended September 30 | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Current | $ | 58,504 | $ | 273,203 | $ | 467,713 | $ | 841,850 | ||||||||
Deferred | 71,975 | - | 224,493 | - | ||||||||||||
Income tax expense | $ | 130,479 | $ | 273,203 | $ | 692,206 | $ | 841,850 |
For the three months ended September 30 | For the nine months ended September 30 | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net income attributable to the Company | $ | 1,936,898 | $ | 647,181 | $ | 4,734,254 | $ | 3,193,778 | ||||||||
Add: interest expense related to convertible notes | 756 | 2,252 | ||||||||||||||
Subtract: Unamortized issuance costs and discount on convertible notes | (44,350 | ) | (44,350 | ) | ||||||||||||
Adjusted net income for calculating EPS-diluted | $ | 1,936,898 | $ | 603,587 | $ | 4,734,254 | $ | 3,151,680 | ||||||||
Weighted average number of common stock – Basic | 13,558,326 | 11,914,825 | 13,546,116 | 11,692,604 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Convertible notes | 88,083 | 22,728 | ||||||||||||||
Weighted average number of common stock – Diluted | 13,558,326 | 12,002,908 | 13,546,116 | 11,715,332 | ||||||||||||
Earnings per share - basic | $ | 0.14 | $ | 0.05 | $ | 0.35 | $ | 0.27 | ||||||||
Earnings per share -diluted | $ | 0.14 | $ | 0.05 | $ | 0.35 | $ | 0.27 |
For the three months ended September 30 | For the nine months ended September 30 | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net income attributable to the Company | $ | 1,793,898 | $ | 647,181 | $ | 4,009,254 | $ | 3,193,778 | ||||||||
Add: interest expense related to convertible notes | 756 | 2,252 | ||||||||||||||
Subtract: Unamortized issuance costs and discount on convertible notes | (44,350 | ) | (44,350 | ) | ||||||||||||
Adjusted net income for calculating EPS-diluted | $ | 1,793,898 | $ | 603,587 | $ | 4,009,254 | $ | 3,151,680 | ||||||||
Weighted average number of common stock – Basic | 13,558,326 | 11,914,825 | 13,546,116 | 11,692,604 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Convertible notes | 88,083 | 22,728 | ||||||||||||||
Weighted average number of common stock – Diluted | 13,558,326 | 12,002,908 | 13,546,116 | 11,715,332 | ||||||||||||
Earnings per share - basic | $ | 0.13 | $ | 0.05 | $ | 0.30 | $ | 0.27 | ||||||||
Earnings per share -diluted | $ | 0.13 | $ | 0.05 | $ | 0.30 | $ | 0.27 |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Nanjing High-Tech Knitting & Weaving Technology Development Co., Ltd | $ | 111,654 | $ | 222,203 | $ | 520,598 | $ | 291,122 | ||||||||
Nanjing Ever-Kyowa Garment Washing Co., Ltd., | 158,518 | 249,592 | 653,232 | 571,321 | ||||||||||||
$ | 270,172 | $ | 471,795 | $ | 1,173,830 | $ | 862,443 |
Accounts Receivable | Accounts Payable | Net | Accounts Receivable | Accounts Payable | Net | |||||||||||||||||||
As of January 1,2009 | $ | 17,938,281 | $ | 6,372,707 | $ | 11,565,574 | $ | 17,938,281 | $ | 6,372,707 | $ | 11,565,574 | ||||||||||||
Sales/Purchases | $ | 52,789,443 | $ | 30,469,297 | $ | 52,789,443 | $ | 30,469,297 | ||||||||||||||||
Payments Received/Made | $ | 53,315,655 | $ | 29,905,606 | $ | 53,315,655 | $ | 29,905,606 | ||||||||||||||||
As of September 30,2009 | $ | 17,412,069 | $ | 6,936,397 | $ | 10,475,672 | $ | 17,412,069 | $ | 6,936,397 | $ | 10,475,672 |
2009 | 2008 | |||||||
Nanjing High-Tech Knitting & Weaving Technology Development Co., Ltd | $ | 30,714 | ||||||
Ever-Glory Enterprise HK Limited | 415,323 | $ | 754,589 | |||||
Shanghai La Chapelle Garment and Accessories Company Limited | 293,400 | |||||||
Total | $ | 739,437 | $ | 754,589 |
Three months ended September 30 | Nine months ended September 30 | Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |||||||||||||||||||||||||
The People’s republic of China | $ | 3,874,933 | $ | 3,978,707 | $ | 10,002,626 | $ | 8,049,002 | $ | 3,874,933 | $ | 3,978,707 | $ | 10,002,626 | $ | 8,049,002 | ||||||||||||||||
Europe | 11,973,636 | 14,924,436 | 35,450,762 | 42,178,290 | 11,973,636 | 14,924,436 | 35,450,762 | 42,178,290 | ||||||||||||||||||||||||
Japan | 3,106,221 | 6,925,551 | 10,347,924 | 12,739,050 | 3,106,221 | 6,925,551 | 10,347,924 | 12,739,050 | ||||||||||||||||||||||||
United States | 5,981,931 | 6,056,882 | 10,768,725 | 12,734,839 | 5,981,931 | 6,056,882 | 10,768,725 | 12,734,839 | ||||||||||||||||||||||||
Total | $ | 24,936,721 | $ | 31,885,576 | $ | 66,570,037 | $ | 75,701,181 | $ | 24,936,721 | $ | 31,885,576 | $ | 66,570,037 | $ | 75,701,181 |
Wholesale segment | Retail segment | Corporate and others | Total | |||||||||||||
Nine months ended September 30,2009 | ||||||||||||||||
Segment profit or loss: | ||||||||||||||||
Net revenue from external customers | $ | 59,369,406 | $ | 7,188,520 | $ | - | $ | 66,557,926 | ||||||||
Net revenue from related parties | $ | 12,111 | $ | 12,111 | ||||||||||||
Income from operations | $ | 5,311,244 | $ | -67,264 | $ | - | $ | 5,243,980 | ||||||||
Interest income | $ | 445,117 | $ | - | $ | - | $ | 445,117 | ||||||||
Interest expense | $ | 245,105 | $ | 87,795 | $ | 332,900 | ||||||||||
Depreciation and amortization | $ | 753,866 | $ | 758,223 | $ | 1,512,089 | ||||||||||
Income tax expense | $ | 692,206 | $ | - | $ | 692,206 | ||||||||||
Segment assets: | ||||||||||||||||
Additions to property, plant and equipment | $ | 76,469 | $ | 907,877 | $ | 984,346 | ||||||||||
Total assets | $ | 58,779,581 | $ | 5,529,624 | $ | 47,504,883 | $ | 111,814,088 | ||||||||
Nine months ended September 30,2008 | ||||||||||||||||
Segment profit or loss: | ||||||||||||||||
Net revenue from external customers | $ | 73,779,891 | $ | 1,411,145 | $ | - | $ | 75,191,036 | ||||||||
Net revenue from related parties | $ | 510,145 | $ | 510,145 | ||||||||||||
Income from operations | $ | 6,748,702 | $ | -7,612 | $ | -204,605 | $ | 6,536,485 | ||||||||
Interest income | $ | 117,431 | $ | 4,072 | $ | 113 | $ | 121,616 | ||||||||
Interest expense | $ | 220,827 | $ | 2,456,719 | $ | 2,677,546 | ||||||||||
Depreciation and amortization | $ | 712,737 | $ | 1,709 | $ | 714,446 | ||||||||||
Income tax expense | $ | 841,850 | $ | - | $ | 841,850 | ||||||||||
Segment assets: | ||||||||||||||||
Additions to property, plant and equipment | $ | 406,280 | $ | 394,389 | $ | 800,669 | ||||||||||
Total assets | $ | 44,383,899 | $ | 3,086,252 | $ | 40,286,454 | $ | 87,756,605 |
Wholesale segment | Retail segment | Corporate and others | Total | |||||||||||||
Nine months ended September 30,2009 | ||||||||||||||||
Segment profit or loss: | ||||||||||||||||
Net revenue from external customers | $ | 59,369,406 | $ | 7,188,520 | $ | - | $ | 66,557,926 | ||||||||
Net revenue from related parties | $ | 12,111 | $ | 12,111 | ||||||||||||
Income from operations | $ | 5,311,244 | $ | -67,264 | $ | - | $ | 5,243,980 | ||||||||
Interest income | $ | 445,117 | $ | - | $ | - | $ | 445,117 | ||||||||
Interest expense | $ | 245,105 | $ | 87,795 | $ | 332,900 | ||||||||||
Depreciation and amortization | $ | 753,866 | $ | 758,223 | $ | 1,512,089 | ||||||||||
Income tax expense | $ | 692,206 | $ | - | $ | 692,206 | ||||||||||
Segment assets: | ||||||||||||||||
Additions to property, plant and equipment | $ | 76,469 | $ | 907,877 | $ | 984,346 | ||||||||||
Total assets | $ | 58,779,581 | $ | 5,529,624 | $ | 47,504,883 | $ | 111,814,088 | ||||||||
Nine months ended September 30,2008 | ||||||||||||||||
Segment profit or loss: | ||||||||||||||||
Net revenue from external customers | $ | 73,779,891 | $ | 1,411,145 | $ | - | $ | 75,191,036 | ||||||||
Net revenue from related parties | $ | 510,145 | $ | 510,145 | ||||||||||||
Income from operations | $ | 6,748,702 | $ | -7,612 | $ | -204,605 | $ | 6,536,485 | ||||||||
Interest income | $ | 117,431 | $ | 4,072 | $ | 113 | $ | 121,616 | ||||||||
Interest expense | $ | 220,827 | $ | 2,456,719 | $ | 2,677,546 | ||||||||||
Depreciation and amortization | $ | 712,737 | $ | 1,709 | $ | 714,446 | ||||||||||
Income tax expense | $ | 841,850 | $ | - | $ | 841,850 | ||||||||||
Segment assets: | ||||||||||||||||
Additions to property, plant and equipment | $ | 406,280 | $ | 394,389 | $ | 800,669 | ||||||||||
Total assets | $ | 44,383,899 | $ | 3,086,252 | $ | 40,286,454 | $ | 87,756,605 |
September 30,2009 | September 30,2008 | |||||||
Revenues: | ||||||||
Total reportable segments | $ | 66,570,037 | $ | 75,701,181 | ||||
Elimination of intersegment revenues | - | |||||||
Total consolidated | $ | 66,570,037 | $ | 75,701,181 | ||||
Income (loss) from operations: | ||||||||
Total segments | $ | 5,243,980 | $ | 6,536,485 | ||||
Elimination of intersegment profits | - | - | ||||||
Total consolidated | $ | 5,243,980 | $ | 6,536,485 | ||||
Total assets: | ||||||||
Total segments | $ | 111,814,088 | $ | 87,756,605 | ||||
Elimination of intersegment receivables | (57,443,102 | ) | (43,475,696 | ) | ||||
Total consolidated | $ | 54,370,986 | $ | 44,280,909 |
The reconciliations of segment information to the Company’s consolidated totals were as follows: | ||||||||||||||||
September 30,2009 | September 30,2008 | |||||||||||||||
Revenues: | ||||||||||||||||
Total reportable segments | $ | 66,570,037 | $ | 75,701,181 | ||||||||||||
Elimination of intersegment revenues | - | |||||||||||||||
Total consolidated | $ | 66,570,037 | $ | 75,701,181 | ||||||||||||
Income (loss) from operations: | ||||||||||||||||
Total segments | $ | 5,243,980 | $ | 6,536,485 | ||||||||||||
Elimination of intersegment profits | - | - | ||||||||||||||
Total consolidated | $ | 5,243,980 | $ | 6,536,485 | ||||||||||||
Total assets: | ||||||||||||||||
Total segments | $ | 111,814,088 | $ | 87,756,605 | ||||||||||||
Elimination of intersegment receivables | (57,443,102 | ) | (43,475,696 | ) | ||||||||||||
Total consolidated | $ | 54,370,986 | $ | 44,280,909 |
Wholesale segment | Retail segment | Corporate and others | Total | |||||||||||||
Three months ended September 30,2009 | ||||||||||||||||
Segment profit or loss: | ||||||||||||||||
Net revenue from external customers | $ | 22,311,223 | $ | 2,622,738 | $ | - | $ | 24,933,961 | ||||||||
Net revenue from related parties | $ | 2,760 | $ | - | $ | - | $ | 2,760 | ||||||||
Income from operations | $ | 1,992,626 | $ | -19,143 | $ | - | $ | 1,973,483 | ||||||||
Interest income | $ | 180,088 | $ | - | $ | 1 | $ | 180,089 | ||||||||
Interest expense | $ | 64,750 | $ | - | $ | 29,266 | $ | 94,016 | ||||||||
Depreciation and amortization | $ | 250,528 | $ | 274,420 | $ | - | $ | 524,948 | ||||||||
Income tax expense | $ | 130,479 | $ | - | $ | - | $ | 130,479 | ||||||||
Segment assets: | ||||||||||||||||
Additions to property, plant and equipment | $ | 13,526 | $ | 847,941 | $ | - | $ | 861,467 | ||||||||
Total assets | $ | 58,779,581 | $ | 5,529,624 | $ | 47,504,883 | $ | 111,814,088 | ||||||||
Three months ended September 30,2008 | ||||||||||||||||
Segment profit or loss: | ||||||||||||||||
Net revenue from external customers | $ | 30,829,847 | $ | 1,038,147 | $ | - | $ | 31,867,994 | ||||||||
Net revenue from related parties | $ | 17,582 | $ | - | $ | - | $ | 17,582 | ||||||||
Income from operations | $ | 2,363,116 | $ | -16,070 | $ | -4,359 | $ | 2,342,687 | ||||||||
Interest income | $ | 39,336 | $ | 1,698 | $ | 18 | $ | 41,052 | ||||||||
Interest expense | $ | 76,481 | $ | - | $ | 1,392,111 | $ | 1,468,592 | ||||||||
Depreciation and amortization | $ | 331,498 | $ | 1,268 | $ | - | $ | 332,766 | ||||||||
Income tax expense | $ | 275,911 | $ | -2,708 | $ | - | $ | 273,203 | ||||||||
Segment assets: | ||||||||||||||||
Additions to property, plant and equipment | $ | 73,332 | $ | 369,642 | $ | - | $ | 442,974 | ||||||||
Total assets | $ | 44,383,899 | $ | 3,086,252 | $ | 40,286,454 | $ | 87,756,605 |
Wholesale segment | Retail segment | Corporate and others | Total | |||||||||||||
Three months ended September 30,2009 | ||||||||||||||||
Segment profit or loss: | ||||||||||||||||
Net revenue from external customers | $ | 22,311,223 | $ | 2,622,738 | $ | - | $ | 24,933,961 | ||||||||
Net revenue from related parties | $ | 2,760 | $ | - | $ | - | $ | 2,760 | ||||||||
Income from operations | $ | 1,992,626 | $ | -19,143 | $ | - | $ | 1,973,483 | ||||||||
Interest income | $ | 180,088 | $ | - | $ | 1 | $ | 180,089 | ||||||||
Interest expense | $ | 64,750 | $ | - | $ | 29,266 | $ | 94,016 | ||||||||
Depreciation and amortization | $ | 250,528 | $ | 274,420 | $ | - | $ | 524,948 | ||||||||
Income tax expense | $ | 130,479 | $ | - | $ | - | $ | 130,479 | ||||||||
Segment assets: | ||||||||||||||||
Additions to property, plant and equipment | $ | 13,526 | $ | 847,941 | $ | - | $ | 861,467 | ||||||||
Total assets | $ | 58,779,581 | $ | 5,529,624 | $ | 47,504,883 | $ | 111,814,088 | ||||||||
Three months ended September 30,2008 | ||||||||||||||||
Segment profit or loss: | ||||||||||||||||
Net revenue from external customers | $ | 30,829,847 | $ | 1,038,147 | $ | - | $ | 31,867,994 | ||||||||
Net revenue from related parties | $ | 17,582 | $ | - | $ | - | $ | 17,582 | ||||||||
Income from operations | $ | 2,363,116 | $ | -16,070 | $ | -4,359 | $ | 2,342,687 | ||||||||
Interest income | $ | 39,336 | $ | 1,698 | $ | 18 | $ | 41,052 | ||||||||
Interest expense | $ | 76,481 | $ | - | $ | 1,392,111 | $ | 1,468,592 | ||||||||
Depreciation and amortization | $ | 331,498 | $ | 1,268 | $ | - | $ | 332,766 | ||||||||
Income tax expense | $ | 275,911 | $ | -2,708 | $ | - | $ | 273,203 | ||||||||
Segment assets: | ||||||||||||||||
Additions to property, plant and equipment | $ | 73,332 | $ | 369,642 | $ | - | $ | 442,974 | ||||||||
Total assets | $ | 44,383,899 | $ | 3,086,252 | $ | 40,286,454 | $ | 87,756,605 |
The reconciliations of segment information to the Company’s consolidated totals were as follows: | ||||||||||||||||
September 30,2009 | September 30,2008 | |||||||||||||||
Revenues: | ||||||||||||||||
Total reportable segments | $ | 24,936,721 | $ | 31,885,576 | ||||||||||||
Elimination of intersegment revenues | - | - | ||||||||||||||
Total consolidated | $ | 24,936,721 | $ | 31,885,576 | ||||||||||||
Income (loss) from operations: | ||||||||||||||||
Total segments | $ | 1,973,483 | $ | 2,342,687 | ||||||||||||
Elimination of intersegment profits | - | - | ||||||||||||||
Total consolidated | $ | 1,973,483 | $ | 2,342,687 | ||||||||||||
Total assets: | ||||||||||||||||
Total segments | $ | 111,814,088 | $ | 87,756,605 | ||||||||||||
Elimination of intersegment receivables | (57,443,102 | ) | (43,475,696 | ) | ||||||||||||
Total consolidated | $ | 54,370,986 | $ | 44,280,909 |
September 30,2009 | September 30,2008 | |||||||
Revenues: | ||||||||
Total reportable segments | $ | 24,936,721 | $ | 31,885,576 | ||||
Elimination of intersegment revenues | - | - | ||||||
Total consolidated | $ | 24,936,721 | $ | 31,885,576 | ||||
Income (loss) from operations: | ||||||||
Total segments | $ | 1,973,483 | $ | 2,342,687 | ||||
Elimination of intersegment profits | - | - | ||||||
Total consolidated | $ | 1,973,483 | $ | 2,342,687 | ||||
Total assets: | ||||||||
Total segments | $ | 111,814,088 | $ | 87,756,605 | ||||
Elimination of intersegment receivables | (57,443,102 | ) | (43,475,696 | ) | ||||
Total consolidated | $ | 54,370,986 | $ | 44,280,909 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
3Q2008 | FY2008 | 1Q2009 | 2Q2009 | 3Q2009 | ||||||||||||||||
Total stores | 55 | 93 | 102 | 130 | 154 | |||||||||||||||
Total square feet | 59,341 | 84,776 | 97,220 | 121,643 | 142,632 | |||||||||||||||
Sales per square foot per month | $ | 7 | $ | 13 | $ | 12 | $ | 7 | $ | 8 |
Three months ended September 30 | ||||||||||||||||
2009 | 2008 | |||||||||||||||
(in U.S. Dollars, except for percentages) | ||||||||||||||||
Sales | $ | 24,936,721 | 100.0 | % | $ | 31,885,576 | 100.0 | % | ||||||||
Gross Profit | 4,633,705 | 18.6 | 4,590,371 | 14.4 | ||||||||||||
Operating Expenses | 2,660,222 | 10.7 | 2,247,684 | 7.0 | ||||||||||||
Income From Operations | 1,973,483 | 7.9 | 2,342,687 | 7.3 | ||||||||||||
Other Income (Expenses) | 86,342 | 0.3 | (1,426,969 | ) | (4.5 | ) | ||||||||||
Income Tax Expense | 130,479 | 0.5 | 273,203 | 0.9 | ||||||||||||
Net Income | $ | 1,929,346 | 7.7 | % | $ | 642,515 | 2.0 | % |
Three months ended September 30 | ||||||||||||||||
2009 | 2008 | |||||||||||||||
(in U.S. Dollars, except for percentages) | ||||||||||||||||
Sales | $ | 24,936,721 | 100.0 | % | $ | 31,885,576 | 100.0 | % | ||||||||
Gross Profit | 4,633,705 | 18.6 | 4,590,371 | 14.4 | ||||||||||||
Operating Expenses | 2,660,222 | 10.7 | 2,247,684 | 7.0 | ||||||||||||
Income From Operations | 1,973,483 | 7.9 | 2,342,687 | 7.3 | ||||||||||||
Other Income (Expenses) | (56,658) | (0.2 | ) | (1,426,969 | ) | (4.5 | ) | |||||||||
Income Tax Expense | 130,479 | 0.5 | 273,203 | 0.9 | ||||||||||||
Net Income | $ | 1,786,346 | 7.2 | % | $ | 642,515 | 2.0 | % |
Three months ended September 30,2009 | % of total sales | Three months ended September 30,2008 | % of total sales | Growth(Decrease) in 2009 compared with 2008 | ||||||||||||||||
Wholesale business | ||||||||||||||||||||
The People’s Republic of China | $ | 1,250,316 | 5.0 | % | $ | 2,940,563 | 9.2 | % | (57.5 | )% | ||||||||||
Europe | 11,973,636 | 48.0 | % | 14,924,436 | 46.8 | % | (19.8 | ) | ||||||||||||
Japan | 3,106,221 | 12.5 | % | 6,925,551 | 21.7 | % | (55.1 | ) | ||||||||||||
United States | 5,981,931 | 24.0 | % | 6,056,882 | 19.0 | % | (1.2 | ) | ||||||||||||
Sub total | 22,312,104 | 89.5 | % | 30,847,432 | 96.7 | % | (27.7 | ) | ||||||||||||
Retail business | 2,624,617 | 10.5 | % | 1,038,144 | 3.3 | % | 152.8 | |||||||||||||
Total | $ | 24,936,721 | 100.0 | % | $ | 31,885,576 | 100.0 | % | (21.8 | )% |
Three Months Ended September 30, | Growth(Decrease) | |||||||||||||||||||
2009 | 2008 | 2009 compared | ||||||||||||||||||
(in U.S. dollars, except for percentages) | with 2008 | |||||||||||||||||||
Wholesale sales | $ | 22,312,104 | 100.0 | % | $ | 30,847,432 | 100.0 | % | (27.7 | )% | ||||||||||
Raw Materials | 10,907,279 | 48.9 | 13,735,548 | 44.5 | (20.6 | ) | ||||||||||||||
Labor | 808,145 | 3.6 | 849,187 | 2.8 | (4.8 | ) | ||||||||||||||
Outsourced Production Costs | 6,846,590 | 30.7 | 11,846,954 | 38.4 | (42.2 | ) | ||||||||||||||
Other and Overhead | 165,919 | 0.7 | 195,881 | 0.6 | (15.3 | ) | ||||||||||||||
Total Cost of Sales for Wholesale | 18,727,934 | 83.9 | 26,627,570 | 86.3 | (29.7 | ) | ||||||||||||||
Gross Profit for Wholesale | 3,584,170 | 16.1 | 4,219,862 | 13.7 | (15.1 | ) | ||||||||||||||
Net Sales for Retail | 2,624,617 | 100.0 | 1,038,144 | 100.0 | 152.8 | |||||||||||||||
Production Costs | 686,195 | 26.1 | 212,659 | 20.5 | 222.7 | |||||||||||||||
Rent | 888,887 | 33.9 | 454,976 | 43.8 | 95.4 | |||||||||||||||
Total Cost of Sales for Retail | 1,575,082 | 60.0 | 667,635 | 64.3 | 135.9 | |||||||||||||||
Gross Profit for Retail | 1,049,535 | 40.0 | 370,509 | 35.7 | 183.3 | |||||||||||||||
Total Cost of Sales | 20,303,016 | 81.4 | 27,295,205 | 85.6 | (25.6 | ) | ||||||||||||||
Gross Profit | $ | 4,633,705 | 18.6 | % | $ | 4,590,371 | 14.4 | % | 0.9 | % |
For the three months ended September 30, | ||||||||||||||||||||
2009 | 2008 | Increase (Decrease) | ||||||||||||||||||
(in U.S. Dollars, except for percentages) | ||||||||||||||||||||
Gross Profit | $ | 4,633,705 | 18.6 | % | $ | 4,590,371 | 14.4 | % | 0.9 | % | ||||||||||
Operating Expenses: | ||||||||||||||||||||
Selling Expenses | 1,097,840 | 4.4 | 563,971 | 1.8 | 94.7 | |||||||||||||||
General and Administrative Expenses | �� | 1,562,382 | 6.3 | 1,683,713 | 5.3 | (7.2 | ) | |||||||||||||
Total | 2,660,222 | 10.7 | 2,247,684 | 7.1 | 18.4 | |||||||||||||||
Income from Operations | $ | 1,973,483 | 7.9 | % | $ | 2,342,687 | 7.3 | % | (15.8 | )% |
Goldenway | New-Tailun | Catch-Luck | LA GO GO | Ever-Glory Apparel | ||||||||||||||||
2008 | 25.0 | % | 12.5 | % | 12.5 | % | 25.0 | % | * | |||||||||||
2009 | 25.0 | % | 12.5 | % | 12.5 | % | 25.0 | % | 25.0 | % |
Nine months ended September 30 | ||||||||||||||||
2009 | 2008 | |||||||||||||||
(in U.S. Dollars, except for percentages) | ||||||||||||||||
Sales | $ | 66,570,037 | 100.0 | % | $ | 75,701,181 | 100.0 | % | ||||||||
Gross Profit | 13,855,421 | 20.8 | 12,665,244 | 16.7 | ||||||||||||
Operating Expenses | 8,611,441 | 12.9 | 6,128,759 | 8.1 | ||||||||||||
Income From Operations | 5,243,980 | 7.9 | 6,536,485 | 8.6 | ||||||||||||
Other Income(Expenses) | 157,469 | 0.2 | (2,502,274 | ) | (3.3 | ) | ||||||||||
Income Tax Expense | 692,206 | 1.0 | 841,850 | 1.1 | ||||||||||||
Net Income | $ | 4,709,243 | 7.1 | % | $ | 3,192,361 | 4.2 | % |
Nine months ended September 30,2009 | % of total sales | Nine months ended September 30,2008 | % of total sales | Growth(Decrease) in 2009 compared with 2008 | ||||||||||||||||
Wholesale business | ||||||||||||||||||||
The People’s Republic of China | $ | 2,814,106 | 4.2 | % | $ | 6,638,102 | 8.8 | % | (57.6 | ) % | ||||||||||
Europe | 35,450,762 | 53.3 | % | 42,178,290 | 55.7 | % | (16.0 | ) | ||||||||||||
Japan | 10,347,924 | 15.5 | % | 12,739,050 | 16.8 | % | (18.8 | ) | ||||||||||||
United States | 10,768,725 | 16.2 | % | 12,734,839 | 16.8 | % | (15.4 | ) | ||||||||||||
Sub total | 59,381,517 | 89.2 | % | 74,290,281 | 98.1 | % | (20.1 | ) | ||||||||||||
Retail business | 7,188,520 | 10.8 | % | 1,410,900 | 1.9 | % | 409.5 | |||||||||||||
Total | $ | 66,570,037 | 100.0 | % | $ | 75,701,181 | 100.0 | % | (12.1 | ) % |
Nine Months Ended September 30, | Growth(Decrease) | |||||||||||||||||||
2009 | 2008 | in 2009 compared | ||||||||||||||||||
(in U.S. dollars, except for percentages) | with 2008 | |||||||||||||||||||
Wholesale Sales | $ | 59,381,517 | 100.0 | % | $ | 74,290,281 | 100.0 | % | (20.1 | )% | ||||||||||
Raw Materials | 26,962,460 | 45.4 | 34,860,446 | 46.9 | (22.7 | ) | ||||||||||||||
Labor | 2,265,873 | 3.8 | 2,232,520 | 3.0 | 1.5 | |||||||||||||||
Outsourced Production Costs | 18,523,838 | 31.2 | 24,579,064 | 33.1 | (24.6 | ) | ||||||||||||||
Other and Overhead | 569,559 | 1.0 | 577,946 | 0.8 | (1.5 | ) | ||||||||||||||
Total Cost of Sales for Wholesale | 48,321,731 | 81.4 | 62,249,976 | 83.8 | (22.4 | ) | ||||||||||||||
Gross Profit for Wholesale | 11,059,786 | 18.6 | 12,040,305 | 16.2 | (8.1 | ) | ||||||||||||||
Net Sales for Retail | 7,188,520 | 100.0 | 1,410,900 | 100.0 | 409.5 | |||||||||||||||
Production Costs | 1,800,716 | 25.0 | 330,985 | 23.5 | 444.0 | |||||||||||||||
Rent | 2,592,169 | 36.1 | 454,976 | 32.2 | 469.7 | |||||||||||||||
Total Cost of Sales for Retail | 4,392,885 | 61.1 | 785,961 | 55.7 | 458.9 | |||||||||||||||
Gross Profit for Retail | 2,795,635 | 38.9 | 624,939 | 44.3 | 347.3 | |||||||||||||||
Total Cost of Sales | 52,714,616 | 79.2 | 63,035,937 | 83.3 | (16.4 | ) | ||||||||||||||
Gross Profit | $ | 13,855,421 | 20.8 | % | $ | 12,665,244 | 16.7 | % | 9.4 | % |
Nine months ended September 30 | ||||||||||||||||
2009 | 2008 | |||||||||||||||
(in U.S. Dollars, except for percentages) | ||||||||||||||||
Sales | $ | 66,570,037 | 100.0 | % | $ | 75,701,181 | 100.0 | % | ||||||||
Gross Profit | 13,855,421 | 20.8 | 12,665,244 | 16.7 | ||||||||||||
Operating Expenses | 8,611,441 | 12.9 | 6,128,759 | 8.1 | ||||||||||||
Income From Operations | 5,243,980 | 7.9 | 6,536,485 | 8.6 | ||||||||||||
Other Income(Expenses) | (567,531 | ) | (0.9 | ) | (2,502,274 | ) | (3.3 | ) | ||||||||
Income Tax Expense | 692,206 | 1.0 | 841,850 | 1.1 | ||||||||||||
Net Income | $ | 3,984,243 | 6.0 | % | $ | 3,192,361 | 4.2 | % |
For the nine months ended September 30, | ||||||||||||||||||||
2009 | 2008 | Increase (Decrease) | ||||||||||||||||||
(in U.S. Dollars, except for percentages) | ||||||||||||||||||||
Gross Profit | $ | 13,855,421 | 20.8 | % | $ | 12,665,244 | 16.7 | % | 9.4 | |||||||||||
Operating Expenses: | ||||||||||||||||||||
Selling Expenses | 2,903,655 | 4.4 | 1,210,063 | 1.6 | 140.0 | |||||||||||||||
General and Administrative Expenses | 5,707,786 | 8.5 | 4,918,696 | 6.5 | 16.0 | |||||||||||||||
Total | 8,611,441 | 12.9 | 6,128,759 | 8.1 | 40.5 | |||||||||||||||
Income from Operations | $ | 5,243,980 | 7.9 | % | $ | 6,536,485 | 8.6 | % | (19.8 | ) |
All amounts in millions of U.S. dollars | ||||||||||||||||
Payments due by period | ||||||||||||||||
Less than | ||||||||||||||||
Total | 1 year | 1 - 3 years | 3 - 5 years | |||||||||||||
Loan From Related Party | $ | 2.75 | $ | 0.50 | $ | 2.25 | $ | — | ||||||||
Bank Loans | 5.40 | 5.40 | — | — | ||||||||||||
Operating Lease Obligations | 1.21 | 0.18 | 1.02 | 0.01 | ||||||||||||
$ | 9.36 | 6.08 | $ | 3.27 | $ | 0.01 |
Exhibit No. | Description | |
31.1 | Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
EVER-GLORY INTERNATIONAL GROUP, INC. | ||
January 28, 2010 | By: | /s/ Edward Yihua Kang |
Edward Yihua Kang | ||
Chief Executive Officer | ||
(Principal Executive Officer) |
By: | /s/ Yan Guo | |
Yan Guo | ||
Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |