o
|
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
|
o
|
Accelerated
filer
|
o
|
|
Non-accelerated
filer
|
o
|
Smaller
reporting
company |
x
|
·
|
Restate
the Financial Statements;
|
·
|
Revise
the Recent Accounting Pronouncements and Results of Operations sections in
Item 2, Management's Discussion and Analysis of Financial Condition and
Results of Operations.
|
·
|
Revise
Note 1, Note 2 and Note 5 to the unaudited interim condensed consolidated
Financial Statements; and
|
·
|
Amend
the disclosure contained under Item 4 - Controls and
Procedures;
|
·
|
Re-execute
the certificates required by Section 302 of the Sarbanes-Oxley Act of
2002.
|
EVER-GLORY
INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
|
||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||
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 |
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 |
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
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
PRC
|
$
|
880,545
|
$
|
2,312,172
|
$
|
4,271,595
|
$
|
6,695,424
|
||||||||
Others
|
1,179,280
|
(1,396,454
|
)
|
1,129,854
|
(2,661,213
|
)
|
||||||||||
$
|
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
|
%
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
PRC
Statutory Rate
|
25.0
|
25.0
|
25.0
|
25.0
|
||||||||||||
Income
tax exemption
|
(9.1
|
)
|
(13.0
|
)
|
(11.0
|
)
|
(12.0
|
)
|
||||||||
Other
|
(1.1
|
)
|
2.2
|
|||||||||||||
Effective
income tax rate
|
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
|
|||||||||||||
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
|
|||||||||
As
of January 1,2009
|
$
|
17,938,281
|
$
|
6,372,707
|
$
|
11,565,574
|
||||||
Sales/Purchases
|
$
|
52,789,443
|
$
|
30,469,297
|
||||||||
Payments
Received/Made
|
$
|
53,315,655
|
$
|
29,905,606
|
||||||||
As
of September 30,2009
|
$
|
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
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
The
People’s republic of China
|
$
|
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
|
||||||||||||
Japan
|
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
|
||||||||||||
Total
|
$
|
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
|
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
|
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
|
|
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 | % |
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 | % |
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)
|