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
|
Page
Number
|
||
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
3
|
|
|
||
PART I. FINANCIAL INFORMATION
|
4
|
|
Item 1.
|
Financial Statements
|
4
|
Condensed Consolidated Balance Sheets as of September 30, 2012 (unaudited) and December 31, 2011
|
4
|
|
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2012 and 2011 (unaudited)
|
5
|
|
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011 (unaudited)
|
6
|
|
Notes to the Condensed Consolidated Financial Statements (unaudited)
|
7
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
16
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
28
|
Item 4.
|
Controls and Procedures
|
29
|
PART II. OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
30
|
Item 1A.
|
Risk Factors
|
30
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
30
|
Item 3.
|
Defaults Upon Senior Securities
|
30
|
Item 4.
|
Mine Safety Disclosures
|
30
|
Item 5.
|
Other Information
|
30
|
Item 6.
|
Exhibits
|
30
|
SIGNATURES
|
31
|
Ÿ
|
Competition within our industry;
|
|
Ÿ
|
Seasonality of our sales;
|
|
Ÿ
|
Success of our investments in new product development
|
|
Ÿ
|
Our plans and ability to open new retail stores;
|
Ÿ
|
Success of our acquired businesses;
|
|
Ÿ
|
Our relationships with our major customers;
|
|
Ÿ
|
The popularity of our products;
|
|
Ÿ
|
Relationships with suppliers and cost of supplies;
|
Ÿ
|
Financial and economic conditions in Asia, Japan, Europe and the U.S.;
|
|
Ÿ
|
Anticipated effective tax rates in future years;
|
|
Ÿ
|
Regulatory requirements affecting our business;
|
|
Ÿ
|
Currency exchange rate fluctuations;
|
Ÿ
|
Our future financing needs; and
|
|
Ÿ
|
Our ability to attract additional investment capital on attractive terms.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
AS OF SEPTEMBER 30, 2012 (UNAUDITED) AND DECEMBER 31, 2011
|
||||||||
ASSETS
|
||||||||
September30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
(UNAUDITED ) | ||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 10,392,722 | $ | 8,822,581 | ||||
Accounts receivable
|
42,180,694 | 50,634,388 | ||||||
Inventories
|
50,443,951 | 36,874,804 | ||||||
Value added tax receivable
|
3,915,996 | 1,908,436 | ||||||
Other receivables and prepaid expenses
|
1,717,388 | 1,122,570 | ||||||
Advances on inventory purchases
|
6,629,609 | 2,177,544 | ||||||
Amounts due from related party
|
22,316,496 | 17,623,712 | ||||||
Total Current Assets
|
137,596,856 | 119,164,035 | ||||||
LAND USE RIGHT, NET
|
2,806,943 | 2,845,552 | ||||||
PROPERTY AND EQUIPMENT, NET
|
14,875,971 | 13,210,628 | ||||||
TOTAL ASSETS
|
$ | 155,279,770 | $ | 135,220,215 | ||||
LIABILITIES AND EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Bank loans
|
$ | 38,564,625 | $ | 29,185,381 | ||||
Accounts payable
|
39,545,072 | 41,466,844 | ||||||
Accounts payable and other payables - related parties
|
1,078,145 | 2,759,003 | ||||||
Other payables and accrued liabilities
|
13,702,970 | 5,996,434 | ||||||
Value added and other taxes payable
|
2,012,463 | 2,268,872 | ||||||
Income tax payable
|
301,758 | 368,714 | ||||||
Deferred tax liabilities
|
2,968,782 | 2,460,377 | ||||||
Derivative liability
|
9,000 | - | ||||||
Total Current Liabilities
|
98,182,815 | 84,505,625 | ||||||
LONG-TERM LIABILITIES
|
||||||||
Derivative liability
|
- | 390,800 | ||||||
Total Long-term Liabilities
|
- | 390,800 | ||||||
TOTAL LIABILITIES
|
98,182,815 | 84,896,425 | ||||||
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,
|
||||||||
14,772,270 and 14,760,873 shares issued and outstanding
|
||||||||
as of September 30, 2012 and December 31, 2011, respectively)
|
14,772 | 14,761 | ||||||
Additional paid-in capital
|
3,552,166 | 3,532,369 | ||||||
Retained earnings
|
41,723,143 | 34,976,853 | ||||||
Statutory reserve
|
5,311,921 | 5,311,921 | ||||||
Accumulated other comprehensive income
|
6,494,953 | 6,487,886 | ||||||
Total Stockholders' Equity
|
57,096,955 | 50,323,790 | ||||||
TOTAL LIABILITIES AND EQUITY
|
$ | 155,279,770 | $ | 135,220,215 | ||||
See the accompanying notes to the condensed consolidated financial statements.
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|||||||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011 (UNAUDITED)
|
|||||||||||||||||
Three months ended
|
Nine months ended
|
||||||||||||||||
September30,
|
September30,
|
||||||||||||||||
2012
|
2011
|
2012
|
2011
|
||||||||||||||
NET SALES
|
$ | 69,269,905 | $ | 53,673,933 | $ | 169,691,109 | $ | 149,805,810 | |||||||||
COST OF SALES
|
53,941,736 | 42,478,209 | 129,173,371 | 119,141,327 | |||||||||||||
GROSS PROFIT
|
15,328,169 | 11,195,724 | 40,517,738 | 30,664,483 | |||||||||||||
OPERATING EXPENSES
|
|||||||||||||||||
Selling expenses
|
8,608,695 | 4,257,401 | 21,409,222 | 11,613,276 | |||||||||||||
General and administrative expenses
|
4,152,162 | 3,443,713 | 11,355,568 | 9,772,868 | |||||||||||||
Total Operating Expenses
|
12,760,857 | 7,701,114 | 32,764,790 | 21,386,144 | |||||||||||||
INCOME FROM OPERATIONS
|
2,567,312 | 3,494,610 | 7,752,948 | 9,278,339 | |||||||||||||
OTHER (EXPENSES) INCOME
|
|||||||||||||||||
Interest income
|
360,001 | 214,814 | 970,221 | 361,688 | |||||||||||||
Interest expense
|
(449,413 | ) | (411,206 | ) | (1,454,157 | ) | (932,381 | ) | |||||||||
Change in fair value of derivative liability
|
91,000 | 15,500 | 381,800 | 345,800 | |||||||||||||
Other (expenses) income
|
(130,359 | ) | 36,058 | 105,954 | 60,192 | ||||||||||||
Total Other (Expenses) Income
|
(128,771 | ) | (144,834 | ) | 3,818 | (164,701 | ) | ||||||||||
INCOME BEFORE INCOME TAX EXPENSE
|
2,438,541 | 3,349,776 | 7,756,766 | 9,113,638 | |||||||||||||
INCOME TAX EXPENSE
|
(164,609 | ) | (646,793 | ) | (1,010,475 | ) | (1,539,790 | ) | |||||||||
NET INCOME
|
2,273,932 | 2,702,983 | 6,746,291 | 7,573,848 | |||||||||||||
Foreign currency translation (loss) gain
|
(192,935 | ) | 332,262 | 7,066 | 1,048,757 | ||||||||||||
COMPREHENSIVE INCOME
|
$ | 2,080,997 | $ | 3,035,245 | $ | 6,753,357 | $ | 8,622,605 | |||||||||
EARNINGS PER SHARE
|
|||||||||||||||||
Basic and diluted
|
$ | 0.15 | $ | 0.18 | $ | 0.46 | $ | 0.51 | |||||||||
Weighted average number of shares outstanding
|
|||||||||||||||||
Basic and diluted
|
14,765,942 | 14,758,944 | 14,765,568 | 14,756,122 | |||||||||||||
See the accompanying notes to the condensed consolidated financial statements. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011 (UNAUDITED)
|
||||||||
|
|
|||||||
2012
|
2011
|
|||||||
|
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income
|
$ | 6,746,291 | $ | 7,573,848 | ||||
Adjustments to reconcile net income to cash provided
|
||||||||
by operating activities:
|
|
|
||||||
Depreciation and amortization
|
3,567,779 | 2,681,508 | ||||||
Change in fair value of derivative liability
|
(381,800 | ) | (345,800 | ) | ||||
Deferred income tax
|
495,875 | 678,614 | ||||||
Interest on loans from related party
|
- | 909 | ||||||
Stock-based compensation
|
19,809 | 19,989 | ||||||
Changes in operating assets and liabilities:
|
|
|
||||||
Accounts receivable
|
8,677,358 | (239,497 | ) | |||||
Inventories
|
(13,797,187 | ) | (8,669,126 | ) | ||||
Provision for obsolete inventories
|
399,431 | - | ||||||
Value added tax receivable
|
(1,997,840 | ) | (2,930,136 | ) | ||||
Other receivables and prepaid expenses
|
(409,176 | ) | 128,107 | |||||
Advances on inventory purchases
|
(4,620,904 | ) | 66,428 | |||||
Amounts due from related parties
|
(4,611,651 | ) | (6,763,734 | ) | ||||
Accounts payable
|
(2,041,985 | ) | 2,673,708 | |||||
Accounts payable and other payables- related parties
|
(1,660,356 | ) | 102,046 | |||||
Other payables and accrued liabilities
|
7,560,031 | 1,416,623 | ||||||
Value added and other taxes payable
|
(258,968 | ) | 56,039 | |||||
Income tax payable
|
(77,826 | ) | 317,904 | |||||
Net cash used in operating activities
|
(2,391,119 | ) | (3,232,570 | ) | ||||
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
|
|
|
||||||
Purchase of property and equipment
|
(5,109,172 | ) | (2,708,530 | ) | ||||
Net cash used in investing activities
|
(5,109,172 | ) | (2,708,530 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
||||||
Proceeds from bank loans
|
47,783,252 | 46,477,661 | ||||||
Repayment of bank loans
|
(38,552,628 | ) | (35,238,760 | ) | ||||
Repayment of loans from related party
|
- | (1,000,720 | ) | |||||
Net cash provided by financing activities
|
9,230,624 | 10,238,181 | ||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(160,192 | ) | 193,209 | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
1,570,141 | 4,490,290 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
8,822,581 | 3,691,653 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 10,392,722 | $ | 8,181,943 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$ | 1,454,157 | $ | 931,401 | ||||
Income taxes
|
$ | 583,429 | 570,055 |
See the accompanying notes to the condensed consolidated financial statements.
|
NOTE 1
|
BASIS OF PRESENTATION
|
NOTE 2
|
SIGNIFICANT ACCOUNTING POLICIES
|
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).
|
NOTE 3
|
INVENTORIES
|
September 30,
2012
|
December 31,
2011
|
|||||||
Raw materials
|
$
|
6,088,191
|
$
|
5,606,073
|
||||
Work-in-progress
|
19,240,414
|
7,919,403
|
||||||
Finished goods
|
26,084,544
|
23,916,206
|
||||||
51,413,149
|
37,441,682
|
|||||||
Less: allowance for obsolete inventories
|
(969,198
|
)
|
(566,878
|
)
|
||||
Total inventories
|
$
|
50,443,951
|
$
|
36,874,804
|
NOTE 4
|
BANK LOANS
|
Bank
|
September 30,
2012
|
December 31,
2011
|
||||||
Nanjing Bank
|
$ | 16,357,623 | $ | 11,731,223 | ||||
Shanghai Pudong Development Bank
|
6,316,000 | 8,966,382 | ||||||
Industrial and Commercial Bank of China
|
- | 5,294,270 | ||||||
Bank of Communications
|
8,109,071 | 2,660,562 | ||||||
Everbright Bank
|
3,158,000 | - | ||||||
HSBC
|
2,729,131 | 532,944 | ||||||
Bank of China
|
1,894,800 | - | ||||||
$ | 38,564,625 | $ | 29,185,381 |
NOTE 5
|
DERIVATIVE WARRANT LIABILITY
|
NOTE 6
|
INCOME TAX
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
PRC
|
$
|
797,928
|
$
|
2,628,998
|
$
|
4,148,206
|
$
|
6,320,088
|
||||||||
Others
|
1,640,613
|
720,778
|
3,608,560
|
2,793,550
|
||||||||||||
Total
|
$
|
2,438,541
|
$
|
3,349,776
|
$
|
7,756,766
|
$
|
9,113,638
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
PRC statutory rate
|
25.0
|
%
|
25.0
|
%
|
25.0
|
%
|
25.0
|
%
|
||||||||
Non-taxable items
|
(1.3
|
)
|
(0.2
|
)
|
(1.7
|
)
|
(1.3
|
)
|
||||||||
Effect of foreign income tax rates
|
(15.9
|
)
|
(5.3
|
)
|
(10.4
|
)
|
(6.7
|
)
|
||||||||
Other
|
(1.0
|
)
|
(0.2
|
)
|
0.1
|
(0.1
|
)
|
|||||||||
Effective income tax rate
|
6.8
|
%
|
19.3
|
%
|
13.0
|
%
|
16.9
|
%
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Current
|
$
|
236,978
|
$
|
(117,529
|
)
|
$
|
502,070
|
$
|
861,176
|
|||||||
Deferred
|
(72,369
|
)
|
764,322
|
508,405
|
678,614
|
|||||||||||
Income tax expense
|
$
|
164,609
|
$
|
646,793
|
$
|
1,010,475
|
$
|
1,539,790
|
NOTE 7
|
STOCKHOLDERS’ EQUITY
|
NOTE 8
|
RELATED PARTY TRANSACTIONS
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
EsCeLav
|
$
|
2,949
|
$
|
2,882
|
$
|
8,882
|
$
|
8,608
|
||||||||
Nanjing Eight-One-Five Hi-Tech (M&E) Co.,Ltd.
|
3,938
|
3,843
|
11,843
|
11,478
|
||||||||||||
Jiangsu Heng-Rui
|
-
|
5,418
|
-
|
16,183
|
||||||||||||
Total
|
$
|
6,887
|
$
|
12,143
|
$
|
20,725
|
$
|
36,269
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Ever-Glory Vietnam
|
$
|
887,853
|
$
|
1,504,916
|
$
|
2,342,989
|
$
|
3,897,349
|
||||||||
Ever-Glory Cambodia
|
483,225
|
915,419
|
3,264,516
|
1,938,674
|
||||||||||||
Nanjing Ever-Kyowa
|
195,992
|
127,328
|
607,626
|
662,941
|
||||||||||||
Jiangsu Ever-Glory
|
16,958
|
5,342
|
25,928
|
5,342
|
||||||||||||
EsC'Lav
|
3,376
|
|
-
|
15,940
|
11,879
|
|||||||||||
Nanjing Knitting
|
-
|
-
|
753,768
|
35,565
|
||||||||||||
Total
|
$
|
1,587,404
|
$
|
2,553,005
|
$
|
7,010,767
|
$
|
6,551,750
|
September 30,
2012
|
December 31,
2011
|
|||||||
Nanjing Knitting
|
$
|
1,126,572
|
$
|
661,139
|
||||
Nanjing Ever-Kyowa
|
229,963
|
436,030
|
||||||
Ever-Glory Vietnam
|
83,553
|
1,305,696
|
||||||
Ever-Glory Cambodia
|
(361,943
|
)
|
330,047
|
|||||
Kunshan Enjin
|
-
|
26,091
|
||||||
Total
|
$
|
1,078,145
|
$
|
2,759,003
|
|
September 30,
2012
|
December 31,
2011
|
||||||
EsC'eLav
|
$
|
53,530
|
$
|
23,565
|
||||
Nanjing Eight-One-Five Hi-tech (M&E) Co.,Ltd.
|
11,843
|
-
|
||||||
Jiangsu Ever-Glory
|
22,251,123
|
17,600,147
|
||||||
Total
|
$
|
22,316,496
|
$
|
17,623,712
|
Accounts Receivable
|
Accounts
Payable
|
Net
|
||||||||||
As of January 1, 2012
|
$
|
19,999,373
|
$
|
2,399,226
|
$
|
17,600,147
|
||||||
Sales/Purchases
|
$
|
7,034,690
|
5,998,925
|
|||||||||
Payments Received/Made
|
$
|
1,752,137
|
$
|
5,367,348
|
||||||||
As of September 30, 2012
|
$
|
25,281,926
|
$
|
3,030,803
|
$
|
22,251,123
|
*
|
Included in the Jiangsu Ever-Glory activity is a one-time transaction whereby the Company purchased fabric on behalf of Jiangsu Ever-Glory in the three months ended September 30, 2012. Jiangsu Ever-Glory paid this amount to the Company in November 2012 and the Company subsequently forwarded this amount to the supplier.
|
NOTE 9
|
CONCENTRATIONS AND RISKS
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
The People’s Republic of China
|
$ | 14,814,519 | $ | 14,055,869 | $ | 33,690,321 | $ | 33,890,950 | ||||||||
Germany
|
6,358,446 | 5,480,075 | 15,216,552 | 22,890,796 | ||||||||||||
United Kingdom
|
9,948,373 | 6,785,148 | 17,901,763 | 14,526,418 | ||||||||||||
Europe-Other
|
3,198,985 | 3,922,109 | 10,952,973 | 11,540,852 | ||||||||||||
Japan
|
8,764,281 | 3,655,819 | 17,287,863 | 14,668,238 | ||||||||||||
United States
|
1,816,857 | 8,143,230 | 9,320,440 | 18,797,505 | ||||||||||||
Total wholesale business
|
44,901,461 | 42,042,250 | 104,369,912 | 116,314,759 | ||||||||||||
Retail business
|
24,368,444 | 11,631,683 | 65,321,197 | 33,491,051 | ||||||||||||
Total
|
$ | 69,269,905 | $ | 53,673,933 | $ | 169,691,109 | $ | 149,805,810 |
NOTE 10
|
SEGMENTS
|
Wholesale segment
|
Retail
segment
|
Total
|
||||||||||
Nine months ended September 30, 2012
|
|
|
|
|||||||||
Segment profit or loss:
|
||||||||||||
Net revenue from external customers
|
$ | 104,369,912 | $ | 65,321,197 | $ | 169,691,109 | ||||||
Income from operations
|
$ | 6,803,378 | $ | 949,570 | $ | 7,752,948 | ||||||
Interest income
|
$ | 962,901 | $ | 7,320 | $ | 970,221 | ||||||
Interest expense
|
$ | 1,339,173 | $ | 114,984 | $ | 1,454,157 | ||||||
Depreciation and amortization
|
$ | 745,799 | $ | 2,821,980 | $ | 3,567,779 | ||||||
Income tax expense
|
$ | 211,069 | $ | 799,406 | $ | 1,010,475 | ||||||
|
|
|
||||||||||
Nine months ended September 30, 2011
|
|
|
|
|||||||||
Segment profit or loss:
|
|
|
|
|||||||||
Net revenue from external customers
|
$ | 116,314,759 | $ | 33,491,051 | $ | 149,805,810 | ||||||
Income from operations
|
$ | 8,976,828 | $ | 301,511 | $ | 9,278,339 | ||||||
Interest income
|
$ | 356,640 | $ | 5048 | $ | 361,688 | ||||||
Interest expense
|
$ | 886,027 | $ | 46,354 | $ | 932,381 | ||||||
Depreciation and amortization
|
$ | 742,916 | $ | 1,938,592 | $ | 2,681,508 | ||||||
Income tax expense
|
$ | 1,472,270 | $ | 67,520 | $ | 1,539,790 |
Wholesale segment
|
Retail
segment
|
Total
|
||||||||||
Three months ended September 30, 2012
|
|
|
|
|||||||||
Segment profit or loss:
|
||||||||||||
Net revenue from external customers
|
$ | 44,901,461 | $ | 24,368,444 | $ | 69,269,905 | ||||||
Income from operations
|
$ | 2,308,542 | $ | 258,770 | $ | 2,567,312 | ||||||
Interest income
|
$ | 359,116 | $ | 885 | $ | 360,001 | ||||||
Interest expense
|
$ | 400,419 | $ | 48,994 | $ | 449,413 | ||||||
Depreciation and amortization
|
$ | 246,900 | $ | 1,023,969 | $ | 1,270,869 | ||||||
Income tax expense
|
$ | (476,393 | ) | $ | 641,002 | $ | 164,609 | |||||
|
|
|
||||||||||
Three months ended September 30, 2011
|
|
|
|
|||||||||
Segment profit or loss:
|
|
|
|
|||||||||
Net revenue from external customers
|
$ | 42,042,250 | $ | 11,631,683 | $ | 53,673,933 | ||||||
Income (loss) from operations
|
$ | 3,750,311 | $ | (255,701 | ) | $ | 3,494,610 | |||||
Interest income
|
$ | 211,321 | $ | 3,493 | $ | 214,814 | ||||||
Interest expense
|
$ | 380,784 | $ | 30,422 | $ | 411,206 | ||||||
Depreciation and amortization
|
$ | 252,492 | $ | 762,115 | $ | 1,014,607 | ||||||
Income tax expense
|
$ | 715,331 | $ | (68,538 | ) | $ | 646,793 |
Ÿ
|
Expand our global sourcing network
|
|
Ÿ
|
Expand our overseas low-cost manufacturing base (outside of mainland China);
|
Ÿ
|
Focus on high value-added products and continue our strategy to produce mid to high end apparel;
|
Ÿ
|
Continue to emphasize product design and technology utilization;
|
Ÿ
|
Seek strategic acquisitions of international distributors that could enhance global sales and our distribution network; and
|
|
Ÿ
|
Maintain stable revenue increases in the markets while shifting focus to higher margin wholesale markets such as mainland China.
|
Ÿ
|
Build the LA GO GO brand to be recognized as a major player in the mid-end women's apparel market in China;
|
|
Ÿ
|
Expand the LA GO GO retail network throughout China;
|
Ÿ
|
Improve the LA GO GO retail stores’ efficiency and increase same-store sales;
|
|
|
Ÿ
|
Continue to launch LA GO GO flagship stores in Tier-1 Cities and increase penetration and coverage in Tier-2 and Tier-3 Cities; and
|
Ÿ
|
Become a multi-brand operator by seeking opportunities for long-term cooperation with reputable international brands and by facilitating international brands entry into the Chinese market.
|
Three Months Ended September 30,
|
||||||||||||||||
2012
|
2011
|
|||||||||||||||
(in U.S. Dollars, except for percentages)
|
||||||||||||||||
Sales
|
$
|
69,269,905
|
100.0
|
%
|
$
|
53,673,933
|
100.0
|
%
|
||||||||
Gross Profit
|
$
|
15,328,169
|
22.1
|
%
|
$
|
11,195,724
|
20.9
|
%
|
||||||||
Operating Expense
|
$
|
12,760,857
|
18.4
|
%
|
$
|
7,701,114
|
14.3
|
%
|
||||||||
Income From Operations
|
$
|
2,567,312
|
3.7
|
%
|
$
|
3,494,610
|
6.5
|
%
|
||||||||
Other Expenses (Income)
|
$
|
128,771
|
0.2
|
%
|
$
|
144,834
|
0.3
|
%
|
||||||||
Income tax expense
|
$
|
164,609
|
0.2
|
%
|
$
|
646,793
|
1.2
|
%
|
||||||||
Net Income
|
$
|
2,273,932
|
3.3
|
%
|
$
|
2,702,983
|
5.0
|
%
|
2012
|
% of total
sales
|
2011
|
% of total
sales
|
Change in 2012
Compared with
2011
|
||||||||||||||||
Wholesale business
|
||||||||||||||||||||
The People’s Republic of China
|
$
|
14,814,519
|
21.4
|
%
|
$
|
14,055,869
|
26.2
|
%
|
5.4
|
%
|
||||||||||
Germany
|
6,358,446
|
9.2
|
5,480,075
|
10.2
|
16.0
|
|||||||||||||||
United States
|
1,816,857
|
2.6
|
8,143,230
|
15.2
|
(77.7
|
)
|
||||||||||||||
United Kingdom
|
9,948,373
|
14.4
|
6,785,148
|
12.6
|
46.6
|
|
||||||||||||||
Japan
|
8,764,281
|
12.7
|
3,655,819
|
6.8
|
139.7
|
|||||||||||||||
Europe-Other
|
3,198,985
|
4.6
|
3,922,109
|
7.3
|
(18.4
|
)
|
||||||||||||||
Total wholesale business
|
44,901,461
|
64.8
|
42,042,250
|
78.3
|
6.8
|
|||||||||||||||
Retail business
|
24,368,444
|
35.2
|
11,631,683
|
21.7
|
109.5
|
|||||||||||||||
Total
|
$
|
69,269,905
|
100.0
|
%
|
$
|
53,673,933
|
100.0
|
%
|
29.1
|
%
|
Three months ended September 30,
|
Growth
|
|||||||||||||||||
2012
|
2011
|
In 2012
|
||||||||||||||||
(in U.S. dollars, except for percentages)
|
||||||||||||||||||
Net Sales for Wholesale Sales
|
$
|
44,901,461
|
100.0
|
%
|
$
|
42,042,250
|
100.0
|
%
|
6.8
|
%
|
||||||||
Raw Materials
|
22,372,864
|
49.8
|
21,183,921
|
50.4
|
5.6
|
|||||||||||||
Labor
|
1,240,727
|
2.8
|
1,097,522
|
2.6
|
13.0
|
|||||||||||||
Outsourced Production Costs
|
14,339,488
|
31.9
|
12,491,707
|
29.7
|
14.8
|
|||||||||||||
Other and Overhead
|
167,160
|
0.4
|
149,404
|
0.4
|
11.9
|
|||||||||||||
Total Cost of Sales for Wholesale
|
38,120,239
|
84.9
|
34,922,554
|
83.1
|
9.2
|
|||||||||||||
Gross Profit for Wholesale
|
6,781,222
|
15.1
|
7,119,696
|
16.9
|
(4.8
|
)
|
||||||||||||
Net Sales for Retail
|
24,368,444
|
100.0
|
11,631,683
|
100.0
|
109.5
|
|||||||||||||
Production Costs
|
7,610,338
|
31.2
|
3,920,469
|
33.7
|
94.1
|
|||||||||||||
Rent
|
8,211,159
|
33.7
|
3,635,186
|
31.3
|
125.9
|
|||||||||||||
Total Cost of Sales for Retail
|
15,821,497
|
64.9
|
7,555,655
|
65.0
|
109.4
|
|||||||||||||
Gross Profit for Retail
|
8,546,947
|
35.1
|
4,076,028
|
35.0
|
109.7
|
|||||||||||||
Total Cost of Sales
|
53,941,736
|
77.9
|
42,478,209
|
79.1
|
27.0
|
|||||||||||||
Gross Profit
|
$
|
15,328,169
|
22.1
|
%
|
$
|
11,195,724
|
20.9
|
%
|
36.9
|
%
|
Three Months Ended September 30,
|
||||||||||||||||||
2012
|
2011
|
Increase (decrease)
|
||||||||||||||||
(in U.S. Dollars, except for percentages)
|
||||||||||||||||||
Gross Profit
|
$
|
15,328,169
|
22.1
|
%
|
$
|
11,195,724
|
20.9
|
%
|
36.9
|
%
|
||||||||
Operating Expenses:
|
||||||||||||||||||
Selling Expenses
|
8,608,695
|
12.4
|
%
|
4,257,401
|
7.9
|
102.2
|
||||||||||||
General and Administrative Expenses
|
4,152,162
|
6.0
|
%
|
3,443,713
|
6.4
|
20.6
|
||||||||||||
Total
|
12,760,857
|
18.4
|
%
|
7,701,114
|
14.3
|
65.7
|
||||||||||||
Income from Operations
|
$
|
2,567,312
|
3.7
|
%
|
$
|
3,494,610
|
6.5
|
%
|
(26.5
|
)%
|
Nine Months Ended September 30,
|
||||||||||||||||
2012
|
2011
|
|||||||||||||||
(in U.S. Dollars, except for percentages)
|
||||||||||||||||
Sales
|
$
|
169,691,109
|
100.0
|
%
|
$
|
149,805,810
|
100.0
|
%
|
||||||||
Gross Profit
|
$
|
40,517,738
|
23.9
|
%
|
$
|
30,664,483
|
20.5
|
%
|
||||||||
Operating Expense
|
$
|
32,764,790
|
19.3
|
%
|
$
|
21,386,144
|
14.3
|
%
|
||||||||
Income From Operations
|
$
|
7,752,948
|
4.6
|
%
|
$
|
9,278,339
|
6.2
|
%
|
||||||||
Other Expenses (Income)
|
$
|
(3,818
|
)
|
0.0
|
%
|
$
|
164,701
|
0.1
|
%
|
|||||||
Income tax expense
|
$
|
1,010,475
|
0.6
|
%
|
$
|
1,539,790
|
1.0
|
%
|
||||||||
Net Income
|
$
|
6,746,291
|
4.0
|
%
|
$
|
7,573,848
|
5.1
|
%
|
2012
|
% of total sales
|
2011
|
% of total sales
|
Change
In 2012
|
||||||||||||||||
Wholesale business
|
||||||||||||||||||||
The People’s Republic of China
|
$
|
33,690,321
|
19.9
|
%
|
$
|
33,890,950
|
22.6
|
%
|
(0.6
|
)%
|
||||||||||
Germany
|
15,216,552
|
9.0
|
22,890,796
|
15.3
|
(33.5
|
)
|
||||||||||||||
United States
|
9,320,440
|
5.5
|
18,797,505
|
12.5
|
(50.4
|
)
|
||||||||||||||
United Kingdom
|
17,901,763
|
10.5
|
14,526,418
|
9.7
|
23.2
|
|||||||||||||||
Japan
|
17,287,863
|
10.2
|
14,668,238
|
9.8
|
17.9
|
|||||||||||||||
Europe-Other
|
10,952,973
|
6.5
|
11,540,852
|
7.7
|
(5.1
|
)
|
||||||||||||||
Total wholesale business
|
104,369,912
|
61.5
|
116,314,759
|
77.6
|
(10.3
|
)
|
||||||||||||||
Retail business
|
65,321,197
|
38.5
|
33,491,051
|
22.4
|
95.0
|
|
||||||||||||||
Total
|
$
|
169,691,109
|
100.0
|
%
|
$
|
149,805,810
|
100.0
|
%
|
13.3
|
%
|
Nine months ended September 30,
|
Growth
|
||||||||||||||||||
2012
|
2011
|
(Decrease)
|
|||||||||||||||||
(in U.S. dollars, except for percentages)
|
In 2012
|
||||||||||||||||||
Net Sales for Wholesale Sales
|
$
|
104,369,912
|
100.0
|
%
|
$
|
116,314,759
|
100.0
|
%
|
(10.3
|
)%
|
|||||||||
Raw Materials
|
49,706,704
|
47.6
|
57,909,559
|
49.8
|
(14.2
|
)
|
|||||||||||||
Labor
|
3,287,022
|
3.1
|
3,018,020
|
2.6
|
8.9
|
||||||||||||||
Outsourced Production Costs
|
31,959,810
|
30.6
|
35,485,036
|
30.5
|
(9.9
|
)
|
|||||||||||||
Other and Overhead
|
420,575
|
0.4
|
413,450
|
0.4
|
1.7
|
||||||||||||||
Total Cost of Sales for Wholesale
|
85,374,111
|
81.8
|
96,826,065
|
83.2
|
(11.8
|
)
|
|||||||||||||
Gross Profit for Wholesale
|
18,995,801
|
18.2
|
19,488,694
|
16.8
|
(2.5
|
)
|
|||||||||||||
Net Sales for Retail
|
65,321,197
|
100.0
|
33,491,051
|
100.0
|
95.0
|
||||||||||||||
Production Costs
|
20,692,184
|
31.7
|
11,005,777
|
32.9
|
88.0
|
||||||||||||||
Rent
|
23,107,077
|
35.4
|
11,309,485
|
33.8
|
104.3
|
||||||||||||||
Total Cost of Sales for Retail
|
43,799,261
|
67.1
|
22,315,263
|
66.6
|
96.3
|
||||||||||||||
Gross Profit for Retail
|
21,521,936
|
32.9
|
11,175,788
|
33.4
|
92.6
|
||||||||||||||
Total Cost of Sales
|
129,173,371
|
76.1
|
119,141,327
|
79.5
|
8.4
|
||||||||||||||
Gross Profit
|
$
|
40,517,738
|
23.9
|
%
|
$
|
30,664,483
|
20.5
|
%
|
32.1
|
%
|
Nine months ended September 30,
|
||||||||||||||||||||
2012
|
2011
|
Increase (decrease)
|
||||||||||||||||||
(in U.S. Dollars, exceptfor percentages)
|
||||||||||||||||||||
Gross Profit
|
$
|
40,517,738
|
23.9
|
%
|
$
|
30,664,483
|
20.5
|
%
|
32.1
|
%
|
||||||||||
Operating Expenses:
|
||||||||||||||||||||
Selling Expenses
|
21,409,222
|
12.6
|
11,613,276
|
7.8
|
84.4
|
%
|
||||||||||||||
General and Administrative Expenses
|
11,355,568
|
6.7
|
9,772,868
|
6.5
|
16.2
|
%
|
||||||||||||||
Total
|
32,764,790
|
19.3
|
21,386,144
|
14.3
|
53.2
|
%
|
||||||||||||||
Income from Operations
|
$
|
7,752,948
|
4.6
|
%
|
$
|
9,278,339
|
6.2
|
%
|
(16.4
|
)%
|
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.
|
November 13, 2012
|
EVER-GLORY INTERNATIONAL GROUP, INC.
|
|
By:
|
/s/ Edward Yihua Kang
|
|
Edward Yihua Kang
|
||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
By:
|
/s/ Jiansong Wang
|
|
Jiansong Wang
|
||
Chief Financial Officer
|
||
(Principal Financial and Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ending September 30, 2012 of Ever-Glory International Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
c.
|
5.
|
a.
|
b.
|
Date: November 13, 2012 | /s/ Edward Yihua Kang | |
Edward Yihua Kang | ||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ending September 30, 2012 of Ever-Glory International Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: November 13, 2012 | /s/ Jiansong Wang | |
Jiansong Wang | ||
Chief Finance Officer
|
||
(Principal Financial Officer)
|
1.
|
The Quarterly report on Form 10-Q of the Company for the quarter ended September 30, 2012 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d)); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: November 13, 2012 | /s/ Edward Yihua Kang | |
Edward Yihua Kang | ||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
1.
|
The Quarterly report on Form 10-Q of the Company for the quarter ended September 30, 2012 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d)); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 13, 2012 | /s/ Jiansong Wang | |
Jiansong Wang | ||
Chief Finance Officer
|
||
(Principal Financial Officer)
|
Bank Loans (Details Textual)
|
3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
USD ($)
|
Sep. 30, 2011
USD ($)
|
Sep. 30, 2012
USD ($)
|
Sep. 30, 2011
USD ($)
|
Aug. 31, 2010
Nanjing Bank [Member]
Goldenway [Member]
|
Sep. 30, 2012
Nanjing Bank [Member]
Goldenway [Member]
USD ($)
|
Aug. 02, 2010
Nanjing Bank [Member]
Goldenway [Member]
USD ($)
|
Aug. 02, 2010
Nanjing Bank [Member]
Goldenway [Member]
CNY
|
Sep. 30, 2012
Nanjing Bank [Member]
Goldenway [Member]
Minimum [Member]
|
Sep. 30, 2012
Nanjing Bank [Member]
Goldenway [Member]
Maximum [Member]
|
Oct. 31, 2012
Nanjing Bank [Member]
Ever Glory Apparel [Member]
USD ($)
|
Mar. 31, 2010
Nanjing Bank [Member]
Ever Glory Apparel [Member]
USD ($)
|
Sep. 30, 2012
Nanjing Bank [Member]
Ever Glory Apparel [Member]
USD ($)
|
Mar. 11, 2010
Nanjing Bank [Member]
Ever Glory Apparel [Member]
USD ($)
|
Mar. 11, 2010
Nanjing Bank [Member]
Ever Glory Apparel [Member]
CNY
|
Mar. 31, 2010
Nanjing Bank [Member]
Ever Glory Apparel [Member]
Minimum [Member]
|
Sep. 30, 2012
Nanjing Bank [Member]
Ever Glory Apparel [Member]
Minimum [Member]
|
Mar. 31, 2010
Nanjing Bank [Member]
Ever Glory Apparel [Member]
Maximum [Member]
|
Sep. 30, 2012
Nanjing Bank [Member]
Ever Glory Apparel [Member]
Maximum [Member]
|
Sep. 30, 2012
Nanjing Bank [Member]
La Go Go [Member]
USD ($)
|
Sep. 30, 2012
Nanjing Bank [Member]
La Go Go [Member]
CNY
|
Sep. 30, 2012
Nanjing Bank [Member]
La Go Go [Member]
Minimum [Member]
|
Sep. 30, 2012
Nanjing Bank [Member]
La Go Go [Member]
Maximum [Member]
|
Jan. 31, 2011
Shanghai Pudong Development Bank [Member]
Goldenway [Member]
|
Sep. 30, 2012
Shanghai Pudong Development Bank [Member]
Goldenway [Member]
USD ($)
|
Sep. 30, 2012
Shanghai Pudong Development Bank [Member]
Goldenway [Member]
CNY
|
Jan. 04, 2011
Shanghai Pudong Development Bank [Member]
Goldenway [Member]
USD ($)
|
Jan. 04, 2011
Shanghai Pudong Development Bank [Member]
Goldenway [Member]
CNY
|
Oct. 31, 2012
Bank of Communications [Member]
Ever Glory Apparel [Member]
USD ($)
|
Sep. 30, 2012
Bank of Communications [Member]
Ever Glory Apparel [Member]
USD ($)
|
Sep. 30, 2012
Bank of Communications [Member]
La Go Go [Member]
USD ($)
|
Sep. 30, 2012
Bank of Communications [Member]
La Go Go [Member]
CNY
|
Sep. 30, 2012
Bank of Communications [Member]
La Go Go [Member]
Minimum [Member]
|
Sep. 30, 2012
Bank of Communications [Member]
La Go Go [Member]
Maximum [Member]
|
Sep. 30, 2012
Bank of China [Member]
Ever Glory Apparel [Member]
USD ($)
|
Oct. 31, 2012
HSBC [Member]
Ever Glory Apparel [Member]
USD ($)
|
Sep. 30, 2012
HSBC [Member]
Ever Glory Apparel [Member]
USD ($)
|
Jul. 29, 2011
HSBC [Member]
Ever Glory Apparel [Member]
USD ($)
|
Sep. 30, 2012
Everbright Bank [Member]
Ever Glory Apparel [Member]
USD ($)
|
Sep. 30, 2012
Everbright Bank [Member]
Ever Glory Apparel [Member]
CNY
|
|
Bank Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||
Duration of revolving line of credit agreement | 2 years | 1 year | 1 year | |||||||||||||||||||||||||||||||||||||
Revolving line of credit agreement, maximum borrowing capacity | $ 7,900,000 | 50,000,000 | $ 7,900,000 | 50,000,000 | $ 6,320,000 | 40,000,000 | $ 7,000,000 | |||||||||||||||||||||||||||||||||
Line of credit extended maturity date | Aug. 02, 2013 | Apr. 06, 2013 | Jan. 04, 2013 | Jul. 29, 2013 | ||||||||||||||||||||||||||||||||||||
Revolving line of credit agreement, amount borrowed | 6,320,000 | 3,160,000 | 2,370,000 | 15,000,000 | 6,320,000 | 40,000,000 | 5,050,000 | 1,580,000 | 10,000,000 | 1,890,000 | 2,730,000 | 3,160,000 | 20,000,000 | |||||||||||||||||||||||||||
The effective interest rate during the period | 5.88% | 6.14% | 6.30% | 6.89% | 6.29% | 6.90% | 7.55% | 7.55% | 7.08% | 6.06% | 6.37% | 5.90% | 5.90% | 6.30% | 6.30% | |||||||||||||||||||||||||
Due date of revolving line of credit agreement | From December 2012 to February 2013 | From May 2013 to July 2013 | From April 2013 to September 2013 | From April 2013 to September 2013 | November 2012 | November 2012 | February 2013 | From June to July 2013 | From June to July 2013 | October 2012 | From October to December 2012 | September 2013 | September 2013 | |||||||||||||||||||||||||||
Revolving line of credit agreement, unused capacity | 1,580,000 | 230,000 | 4,270,000 | |||||||||||||||||||||||||||||||||||||
Revolving line of credit agreement, additional borrowings | 4,510,000 | 1,480,000 | ||||||||||||||||||||||||||||||||||||||
Line of credit interest rate on additional borrowing | 3.37% | 4.40% | 5.26% | |||||||||||||||||||||||||||||||||||||
Additional Due date of revolving line of credit agreement | From October 2012 to December 2012 | From October 2012 to December 2012 | ||||||||||||||||||||||||||||||||||||||
Revolving line of credit agreement, collateral amount | 5,650,000 | 2,020,000 | 2,600,000 | 3,400,000 | ||||||||||||||||||||||||||||||||||||
Revolving line of credit agreement, repaid amount | 1,910,000 | 220,000 | 200,000 | |||||||||||||||||||||||||||||||||||||
Additional Bank Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||
Interest | $ 449,413 | $ 411,206 | $ 1,454,157 | $ 931,401 |
Bank Loans
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank Loans [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BANK LOANS |
Bank loans represent amounts due to various banks and are generally due on demand or within one year. These loans can be renewed with the banks. Short term bank loans consisted of the following as of September 30, 2012 and December 31, 2011
On August 2, 2010, Goldenway entered into a two-year revolving line of credit agreement with Nanjing Bank, which allows the Company to borrow up to approximately $7.90 million (RMB50 million). The agreement has been extended until August 2, 2013. These loans are guaranteed by Jiangsu Ever-Glory International Group Corp. (“Jiangsu Ever-Glory”), an entity controlled by Mr. Kang, the Company’s Chairman and Chief Executive Officer. These loans are also collateralized by the Company’s property and equipment. As of September 30, 2012, Goldenway had borrowed $6.32 million under this line of credit from Nanjing Bank with an annual interest rate from 5.88% to 6.14% and due on various dates from December 2012 to February 2013. At September 30, 2012, approximately $1.58 million was unused and available under this line of credit.
On March 11, 2010, Ever-Glory Apparel entered into an one-year line of credit agreement for approximately $7.90 million (RMB50 million) with Nanjing Bank. The agreement has been extended until April 6, 2013. As of September 30, 2012, Ever-Glory Apparel had borrowed $3.16 million from Nanjing Bank with an annual interest rate from 6.3% to 6.89% and due on various dates from May 2013 to July 2013. The loan is guaranteed by Jiangsu Ever-Glory and the Company's chairman and CEO, Mr. Kang. In addition, Ever-Glory Apparel had borrowed $4.51 million from Nanjing Bank with an annual interest rate from 3.37% to 4.4%, due on various dates from October 2012 to December 2012, and collateralized by approximately $5.65 million of accounts receivable from wholesale customers. These bank loans are to be repaid upon receipt of payments from customers. At September 30, 2012, approximately $0.23 million was unused and available. Approximately $1.91 million was repaid in October 2012.
As of September 30, 2012, LA GO GO had borrowed $2.37 million (RMB15.0 million) from Nanjing Bank with an annual interest rate from 6.29% to 6.9% and due on various dates from April 2013 to September 2013. This loan is guaranteed by Jiangsu Ever-Glory and Mr. Kang.
On January 4, 2011, Goldenway entered into a one-year line of credit agreement for approximately $6.32 million (RMB40 million) with Shanghai Pudong Development Bank. In January 2012, the agreement was extended until January 4, 2013. As of September 30, 2012, Goldenway had borrowed the maximum amount available under the line of $6.32 million (RMB40 million), with an annual interest rate of 7.55%. These loans are collateralized by certain properties and land use rights of Goldenway, and are due in November 2012.
As of September 30, 2012, Ever-Glory Apparel had borrowed $5.05 million from the Bank of Communications with an annual interest rate of 7.08%, and due in February 2013. The loan is guaranteed by Jiangsu Ever-Glory and the Company's chairman and CEO, Mr. Kang. In addition, Ever-Glory Apparel had borrowed $1.48
million from the Bank of Communications with an annual interest rate of 5.26%, due on various dates from October 2012 to December 2012, guaranteed by Jiangsu Ever-Glory and Mr. Kang, and collateralized by approximately $2.02 million of accounts receivable from wholesale customers. Approximately $0.22 million was repaid in October 2012.
As of September 30, 2012, LA GO GO had borrowed $1.58 million (RMB10.0 million) from the Bank of Communications with an annual interest rate from 6.06% to 6.37% and due on various dates from June to July 2013. This loan is guaranteed by Jiangsu Ever-Glory and Mr. Kang.
As of September 30, 2012, Ever-Glory Apparel had borrowed $3.16 million (RMB20.0 million) from Everbright Bank, with an annual interest rate of 6.3% and due in September 2013. This loan is guaranteed by Jiangsu Ever-Glory and Mr. Kang.
On July 29, 2011, Ever-Glory Apparel and Perfect Dream collectively entered into a secured banking facility agreement for a combined revolving import facility, letter of credit, invoice financing facilities and a credit line for treasury products of up to $7.0 million with the Nanjing Branch of HSBC (China) Company Limited (“HSBC”). This agreement is guaranteed by the Company and Mr. Kang. The agreement has been extended until July 29, 2013. As of September 30, 2012, Ever-Glory Apparel had borrowed $2.73 million from HSBC with an annual interest rate of 5.9%, due on various dates from October to December 2012, and collateralized by approximately $3.4 million of accounts receivable from wholesale customers. These bank loans are to be repaid upon receipt of payments from customers. As of September 30, 2012, approximately $4.27 million was unused and available. Approximately $0.2 million was repaid in October 2012.
As of September 30, 2012, Ever-Glory Apparel had borrowed $1.89 million from the Bank of China with an annual interest rate of 5.9%, and due on October 2012. The loan is guaranteed by Goldenway, and collateralized by approximately $2.6 million of accounts receivable from wholesale customers. The loan was repaid in full in October 2012.
Total interest expense on bank loans amounted to $449,413 and $411,206 for the three months ended September 30, 2012 and 2011, and $1,454,157 and $932,381 for the nine months ended September 30, 2012 and 2011, respectively.
|
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