Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 08, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Ever-Glory International Group, Inc. | |
Entity Central Index Key | 943,184 | |
Trading Symbol | EVK | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 14,795,992 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 65,177 | $ 62,876 |
Accounts receivable, net | 55,682 | 81,859 |
Inventories | 56,598 | 56,182 |
Value added tax receivable | 1,976 | 3,757 |
Other receivables and prepaid expenses | 4,725 | 5,139 |
Advances on inventory purchases | 4,320 | 3,028 |
Amounts due from related parties | 248 | 265 |
Total Current Assets | 188,726 | 213,106 |
INTANGIBLE ASSETS | 6,616 | 5,995 |
PROPERTY AND EQUIPMENT, NET | 26,172 | 25,891 |
TOTAL ASSETS | 221,514 | 244,992 |
CURRENT LIABILITIES | ||
Bank loans | 41,620 | 37,730 |
Accounts payable | 58,191 | 73,788 |
Accounts payable and other payables - related parties | 4,052 | 4,675 |
Other payables and accrued liabilities | 11,793 | 16,454 |
Value added and other taxes payable | 4,352 | 6,052 |
Income tax payable | 1,005 | 1,712 |
Total Current Liabilities | 121,013 | 140,411 |
NONCURRENT LIABILITIES | ||
Deferred tax liabilities | 1,714 | 1,883 |
TOTAL LIABILITIES | 122,727 | 142,294 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders' equity: | ||
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, 14,795,992 and 14,795,992 shares issued and outstanding As of March 31, 2018 and December 31, 2017, respectively) | 15 | 15 |
Additional paid-in capital | 3,620 | 3,620 |
Retained earnings | 96,010 | 95,195 |
Statutory reserve | 17,794 | 17,794 |
Accumulated other comprehensive income | 6,608 | 2,585 |
Amounts due from related party | (23,928) | (15,449) |
Total equity attributable to stockholders of the Company | 100,119 | 103,760 |
Noncontrolling interest | (1,332) | (1,062) |
Total Equity | 98,787 | 102,698 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 221,514 | $ 244,992 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 14,795,992 | 14,795,992 |
Common stock, shares outstanding | 14,795,992 | 14,795,992 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
SALES | $ 92,785 | $ 85,120 |
COST OF SALES | 61,440 | 56,611 |
GROSS PROFIT | 31,345 | 28,509 |
OPERATING EXPENSES | ||
Selling expenses | 22,225 | 19,745 |
General and administrative expenses | 7,674 | 7,255 |
Total operating expenses | 29,899 | 27,000 |
INCOME FROM OPERATIONS | 1,446 | 1,509 |
OTHER INCOME (EXPENSE) | ||
Interest income | 326 | 257 |
Interest expense | (564) | (327) |
Other income | 136 | 577 |
Total other expenses | (102) | 507 |
INCOME BEFORE INCOME TAX EXPENSE | 1,344 | 2,016 |
INCOME TAX EXPENSE | (757) | (1,217) |
NET INCOME | 587 | 799 |
Net loss attributable to the non-controlling interest | 228 | 175 |
NET INCOME ATTRIBUTABLE TO THE COMPANY | 815 | 974 |
NET INCOME | 587 | 799 |
Foreign currency translation income | 4,023 | 459 |
COMPREHENSIVE INCOME | 4,610 | 1,258 |
Comprehensive loss attributable to the noncontrolling interest | 270 | 180 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY | $ 4,880 | $ 1,438 |
EARNINGS PER SHARE: | ||
Basic and diluted | $ 0.06 | $ 0.07 |
Weighted average number of shares outstanding Basic and diluted | 14,795,992 | 14,789,626 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 587 | $ 799 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 2,537 | 2,241 |
Loss from sale of property and equipment | 4 | 5 |
Provision for obsolete inventories | 1,626 | 4,105 |
Deferred income tax | (234) | (1,180) |
Stock-based compensation | 10 | |
Changes in operating assets and liabilities | ||
Accounts receivable | 28,466 | 23,487 |
Inventories | (129) | 5,541 |
Value added tax receivable | 1,895 | 1,236 |
Other receivables and prepaid expenses | 832 | (543) |
Advances on inventory purchases | (1,175) | (1,730) |
Amounts due from related parties | (165) | (495) |
Accounts payable | (17,944) | (11,762) |
Accounts payable and other payables- related parties | (653) | (1,527) |
Other payables and accrued liabilities | (5,182) | (1,794) |
Value added and other taxes payable | (1,988) | (2,713) |
Income tax payable | (670) | (755) |
Net cash provided by operating activities | 7,807 | 14,925 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (2,552) | (1,209) |
Net cash used in investing activities | (2,552) | (1,209) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from bank loans | 17,346 | 15,671 |
Repayment of bank loans | (14,780) | (12,913) |
Advances to related party | (7,692) | (1,742) |
Net cash provided by (used in) financing activities | (5,126) | 1,016 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 2,172 | 80 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 2,301 | 14,812 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 62,876 | 45,288 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 65,177 | 60,100 |
Cash paid during the period for: | ||
Interest | 564 | 327 |
Income taxes | $ 1,938 | $ 1,853 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Basis of Presentation [Abstract] | |
BASIS OF PRESENTATION | NOTE 1 BASIS OF PRESENTATION Ever-Glory International Group, Inc. (the “Company”), together with its subsidiaries, is an apparel manufacturer, supplier and retailer in The People's Republic of China ("China or "PRC"), with a wholesale segment and a retail segment. The Company’s wholesale business consists of recognized brands for department and specialty stores located in China, Europe, Japan and the United States. The Company’s retail business consists of flagship stores and store-in-stores for the Company’s own-brand products. The Company’s wholesale operations are provided primarily through the Company’s wholly-owned PRC subsidiaries, Goldenway Nanjing Garments Co. Ltd. (“Goldenway”), Nanjing Catch-Luck Garments Co. Ltd. (“Catch-Luck”), Nanjing New-Tailun Garments Co. Ltd (“New-Tailun”), Ever-Glory International Group Apparel Inc.(“Ever-Glory Apparel”), Chuzhou Huirui Garments Co. Ltd. (“Huirui”) and Nanjing Tai Xin Garments Trading Company Limited (“Tai Xin”), and the Company’s wholly-owned Samoa subsidiary, Ever-Glory International Group (HK) Ltd. (“Ever-Glory HK”) and Ever-Glory Supply Chain Service Co., Limited (“Ever-Glory Supply Chain”). The Company’s retail operations are provided through its wholly- owned subsidiaries, Shanghai LA GO Fashion Company Limited (“Shanghai LA GO GO”), Jiangsu LA GO Fashion Company Limited (“Jiangsu LA GO GO”), Tianjin LA GO Fashion Company Limited (“Tianjin LA GO GO”), Shanghai Ya Lan Fashion Company Limited (“Ya Lan”), Shanghai Yiduo Fashion Company Limited (“Shanghai Yiduo”) and Xizang He Meida Trading Company Limited (“He Meida”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the condensed consolidated balance sheet as of March 31, 2018, the condensed consolidated statements of income (loss) and comprehensive income, and cash flows for the three months ended March 31, 2018 and 2017. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Rule 8-03 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, they have been condensed and do not include all of the information and footnotes required by GAAP for complete financial statements. Wholesale revenues are generally higher in the third and fourth fiscal quarters, while retail revenues are generally higher in the first and fourth fiscal quarters. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results of operations to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Significant Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition Revenue from Contracts with Customers The Company operates in two segments – wholesale and retail. The Company recognizes wholesale revenue when a sales order is obtained or a sales contract is entered (i & ii), sales price net of value-added taxes is determined (iii & iv), and title is passed to the customer upon delivery for local sales or upon shipment of the products for export sales (v). The Company recognizes retail revenue when a sales order is obtained (i & ii), sales price net of promotional discounts, rebates, and return allowances is determined (iii & iv), and at the time of the register receipt and the product is picked up by the customer in the retail store (v). Retail online sales revenue is consistent with above (i) to (iv) but recognized when the customer receives the product (v), since we retain a portion of the risk of loss on these sales during transit. Financial Instruments Management has estimated that the carrying amounts of non-related party financial instruments approximate their fair values due to their short-term maturities. The fair value of amounts due from (to) related parties is not practicable to estimate due to the related party nature of the underlying transactions. Accounts Receivable The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management’s assessment of the credit history of its customers and current relationships with them. The Company writes off accounts receivable when amounts are deemed uncollectible. Fair Value Accounting Accounting Standards Codification (“ASC”) 820 “ Fair Value Measurements and Disclosures 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). At March 31, 2018, the Company’s financial assets (all Level 1) consist of cash placed with financial institutions that management considers to be of a high quality. As of March 31, 2018, the Company has three derivative liability subjects to recurring fair value measurement (Level 3) with the change in fair value recognized in earnings (Note 5). The Company has adopted ASC 825-10 “ Financial Instruments Foreign Currency Translation and Other Comprehensive Income The reporting currency of the Company is the U.S. dollar. The functional currency of Ever-Glory, Perfect Dream, Ever-Glory HK and Ever-Glory Supply Chain is the U.S. dollar. The functional currency of Goldenway, New Tailun, Catch-luck, Ever-Glory Apparel, Shanghai LA GO GO, Jiangsu LA GO GO, Tianjin LA GO GO, Shanghai Yiduo, Ya Lan, He Meida, Huirui and Taixin is the Chinese RMB. For subsidiaries whose functional currency is the RMB, all assets and liabilities were translated at the exchange rate at the balance sheet date; equity was translated at historical rates and items in the statement of comprehensive income were translated at the average rate for the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income. The resulting translation gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Items in the cash flow statement are translated at the average exchange rate for the period. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventories [Abstract] | |
INVENTORIES | NOTE 3 INVENTORIES Inventories at March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, (In thousands of Raw materials $ 6,078 $ 2,148 Work-in-progress 12,075 8,852 Finished goods 38,445 45,182 Total inventories $ 56,598 $ 56,182 |
Bank Loans
Bank Loans | 3 Months Ended |
Mar. 31, 2018 | |
Bank Loans [Abstract] | |
BANK LOANS | NOTE 4 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 March 31, 2018 and December 31, 2017. March 31, December 31, Bank (In thousands of Industrial and Commercial Bank of China $ 22,288 $ 21,504 Nanjing Bank 11,144 9,216 Bank of Communications 1,592 1,536 China Minsheng Bank 3,184 3,072 Bank of China 1,592 - HSBC 1,820 2,402 $ 41,620 $ 37,730 In December 2016, Goldenway entered into a line of credit agreement with Industrial and Commercial Bank of China, which allows the Company to borrow up to approximately $9.6 million (RMB60.0 million). These loans are collateralized by the Company’s property and equipment. As of March 31, 2018, Goldenway had borrowed $6.4 million (RMB 40.0 million) under this line of credit with an annual interest rate of 4.7% and due on various dates from January to November 2018. As of March 31, 2018, approximately $3.2 million was unused and available under this line of credit. In September 2015, Ever-Glory Apparel entered into a line of credit agreement for approximately $19.1 million (120.0 million) with Industrial and Commercial Bank of China and collateralized by assets of Jiangsu Ever-Glory’s equity investee, Nanjing Knitting, under a collateral agreement executed among Ever-Glory Apparel, Nanjing Knitting and the bank. As of March 31, 2018, Ever-Glory Apparel had borrowed $15.9 million (RMB 100.0 million) under this line of credit with annual interest rates ranging from 4.57% to 4.70% and due on various dates from April to September 2018. As of March 31, 2018, approximately $3.2 million was unused and available under this line of credit. In June 2016, Goldenway entered into a line of credit agreement with Nanjing Bank, which allows the Company to borrow up to approximately $8.0 million (RMB50.0 million). 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 March 31, 2018, Goldenway had borrowed $1.6 million (RMB 10.0 million) under this line of credit with annual interest rates ranging from 4.37% to 4.54% and due on various dates from May to October 2018. As of March 31, 2018, approximately $6.4 million was unused and available under this line of credit. In June 2016, Ever-Glory Apparel entered into a line of credit agreement for approximately $9.6 million (RMB60.0 million) with Nanjing Bank and guaranteed by Jiangsu Ever-Glory, Mr. Kang and Goldenway. As of March 31, 2018, Ever-Glory Apparel had borrowed $8.0 million (RMB50.0 million) from Nanjing Bank with an annual interest rates ranging from 4.6% to 4.7% and due on various dates from April to September 2018. As of March 31, 2018, approximately $1.6 million was unused and available under this line of credit. In March 2017, LA GO GO entered into a revolving line of credit agreement with Nanjing Bank, which allows the Company to borrow up to approximately $3.2 million (RMB20.0 million). The line of credit is guaranteed by Mr. Kang and Goldenway. As of March 31, 2018, LA GO GO had borrowed $1.6 million (RMB10.0 million) from Nanjing Bank with an annual interest rate 5.0% and due on May 2018. As of March 31, 2018, approximately $1.6 million (RMB10.0 million) was unused and available under this line of credit. In September 2017, LA GO GO entered into a line of credit agreement for approximately $3.5 million (RMB22.0 million) with the Bank of Communications and guaranteed by Jiangsu Ever-Glory, Ever-Glory Apparel and Mr. Kang. As of March 31, 2018, LA GO GO had borrowed $1.6 million (RMB10.0 million) from the Bank of Communications with an annual interest rate 4.57% and due on September 2018. As of March 31, 2018, approximately $1.9 million was unused and available under this line of credit. In December 2017, LA GO GO entered into a line of credit agreement for approximately $3.2 million (RMB20.0 million) with China Minsheng Bank and guaranteed by Ever-Glory Apparel and Mr. Kang. As of March 31, 2018, LA GO GO had borrowed $3.2 million (RMB20.0 million) from China Minsheng Bank with an annual interest rate of 4.6% and due in June 2018. In July 2017, Ever-Glory Apparel entered into a line of credit agreement for approximately $6.4 million (RMB40.0 million) with China Everbright Bank and guaranteed by Goldenway and Mr. Kang. These loans are also collateralized by Jiangsu Ever-Glory’s property. As of March 31, 2018, approximately $6.4 million was unused and available under this line of credit. In October 2017, Ever-Glory Apparel entered into a line of credit agreement for approximately $4.8 million (RMB30.0 million) with Bank of China and guaranteed by Jiangsu Ever-Glory. These loans are also collateralized by assets of Jiangsu Ever-Glory’s equity investee, Chuzhou Huarui, under a collateral agreement executed by Ever-Glory Apparel, Chuzhou Huarui and Bank of China. As of March 31, 2018, Ever-Glory Apparel had borrowed $1.6 million (RMB10.0 million) under this line of credit with an annual interest rate of 4.35% and due in August 2018. As of March 31, 2018, approximately $3.2 million was unused and available under this line of credit. In December 2017, Ever-Glory Apparel and Goldenway 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 $2.5 million with the Nanjing Branch of HSBC (China) Company Limited (“HSBC”). This agreement is guaranteed by the Company and Mr. Kang. As of March 2018, Ever-Glory Apparel had borrowed $1.8 million from HSBC with an annual interest rate of 3.0% and due in October 2018, and collateralized by approximately $2.1 million of accounts receivable from our wholesale customers. These bank loans are to be repaid upon receipt of payments from customers. As of March 31, 2018, approximately $0.7 million was unused and available under this line of credit. All loans have been repaid before or at maturity date. Total interest expense on bank loans amounted to $0.6 million and $0.3 million for the three months ended March 31, 2018 and 2017, respectively. |
Derivative Liability
Derivative Liability | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Liability [Abstract] | |
DERIVATIVE LIABILITY | NOTE 5 DERIVATIVE LIABILITY At December 31, 2017, the Company had five outstanding forward foreign exchange contracts (sell EUR dollars for RMB), with total notional amount of EUR€1.68 million. The fair value of this contract at December 31, 2017 was not significant. At March 31, 2018, the Company had three outstanding forward foreign exchange contracts (sell EUR dollars for RMB), with total notional amount of EUR€1.29 million. The fair value of this contract at March 31, 2018 was not significant. |
Income Tax
Income Tax | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax [Abstract] | |
INCOME TAX | NOTE 6 INCOME TAX The Company’s operating subsidiaries are governed by the Income Tax Law of the PRC concerning Foreign Investment Enterprises and Foreign Enterprises and various local income tax laws (“the Income Tax Laws”). All PRC subsidiaries, except for He Meida, are subject to income tax at the 25% statutory rate. He Meida incorporated in Xizang (Tibet) Autonomous Region is subject to income tax at 15% statutory rate. The local government has implemented an income tax reduction from 15% to 9% valid through December 31, 2018. Perfect Dream was incorporated in the British Virgin Islands (BVI), and under the current laws of the BVI dividends and capital gains arising from the Company’s investments in the BVI are not subject to income taxes. Ever-Glory HK was incorporated in Samoa, and under the current laws of Samoa has no liabilities for income taxes. Ever-Glory Supply Chain Service Co., Limited was incorporated in Hongkong, and under the current laws of Hongkong, are subject to income tax at the 16.5% statutory rate. The PRC’s Enterprise Income Tax Law imposes a 10% withholding income tax for dividends distributed by a foreign invested enterprise in PRC to its immediate holding company outside China; such distributions were exempted under the previous income tax law and regulations. A lower withholding tax rate will be applied if there is a tax treaty arrangement between mainland China and the jurisdiction of the foreign holding company. The foreign invested enterprise became subject to the withholding tax starting from January 1, 2008. Given that the undistributed profits of the Company's subsidiaries in China are intended to be retained in China for business development and expansion purposes, no withholding tax accrual has been made. After the tax liability adjustment resulted from the reevaluation of the Company’s tax position (resulting in the company allocating substantially all of the earnings of the Samoan subsidiary to the PRC and reporting such earnings as taxable in the PRC), pre-tax income for the year ended March 31, 2018 and 2017 was taxable in the following jurisdictions: 2018 2017 (In thousands of PRC $ 1,349 $ 2,019 BVI (3 ) - Others (2 ) (3 ) $ 1,344 $ 2,016 The following table reconciles the PRC statutory rates to the Company’s effective tax rate for the three months ended March 31, 2018 and 2017: 2018 2017 PRC statutory rate 25.0 % 25.0 % Net operating losses for which no deferred tax assets was recognized 31.3 35.4 Effective income tax rate 56.3 % 60.4 % Income tax expense for the three months ended March 31, 2018 and 2017 is as follows: 2018 2017 (In thousands of Current $ 925 $ 2,371 Deferred (168 ) (1,154 ) Income tax expense $ 757 $ 1,217 The Company’s deferred tax liabilities arise from differences between US GAAP and PRC tax accounting for certain revenue and expense items, including timing of deduction of losses from allowances. The Company has not recorded U.S. deferred income taxes on approximately $96.0 million of its non-U.S. subsidiaries’ undistributed earnings because such amounts are intended to be reinvested outside the United States indefinitely. The U.S. Tax Reform signed into law on December 22, 2017 significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. The Company measured the current and deferred taxes based on the provisions of the Tax legislation. After the Company’s measurement, no deferred tax expense (income) relating to the Tax Act changes for the year ended December 31, 2017. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 7 EARNINGS PER SHARE The following demonstrates the calculation for earnings per share for the three months ended March 31, 2018 and 2017: 2018 2017 Weighted average number of common shares- Basic and diluted 14,795,992 14,789,626 Earnings per share - basic and diluted $ 0.06 $ 0.07 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 8 STOCKHOLDERS’ EQUITY On February 28, 2017, the Company issued an aggregate of 2,542 shares of its common stock to two of the Company’s independent directors as compensation for their services in the first and second quarters of 2016. The shares were valued at $1.96 per share, which was the average market price of the common stock for the five days before the grant date. On February 28, 2017, the Company issued an aggregate of 2,354 shares of its common stock to two of the Company’s independent directors as compensation for their services in the third and fourth quarters of 2016. The shares were valued at $2.14 per share, which was the average market price of the common stock for the five days before the grant date. On October 19, 2017, the Company issued an aggregate of 3,156 shares of its common stock to two of the Company’s independent directors as compensation for their services in the first, second and third quarters of 2017. The shares were valued at $2.37 per share, which was the average market price of the common stock for the five days before the grant date. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 9 RELATED PARTY TRANSACTIONS Mr. Kang is the Company’s Chairman and Chief Executive Officer. Ever-Glory Enterprises (HK) Ltd. (Ever-Glory Enterprises) is the Company’s major shareholder. Mr. Xiaodong Yan was Ever-Glory Enterprises’ sole shareholder and sole director. Mr. Huake Kang, Mr. Kang’s son, acquired 83% interest of Ever-Glory Enterprises and became its sole director in 2014. All transactions associated with the following companies controlled by Mr. Kang or his son are considered to be related party transactions, and it is possible that the terms of these transactions may not be the same as those that would result from transactions between unrelated parties. All related party outstanding balances are short-term in nature and are expected to be settled in cash. Other income from Related Parties JiangsuWubijia Trading Company Limited (“Wubijia”) is an entity engaged in high-grade home goods sales and is controlled by Mr. Kang. Wubijia has sold their home goods on consignment in certain Company’s retail stores since the third quarter of 2014. During the three months ended March 31, 2018 and 2017, the Company received $33,622 and $11,565 from the customers and paid $19,188 and $8,954 to Wubijia through the consignment, respectively. The net profit of $14,435 and $2,611 was recorded as other income during the three months ended March 31, 2018 and 2017, respectively. Nanjing Knitting Company Limited (“Nanjing Knitting”) is an entity engaged in knitted fabric products and knitting underwear sales and is controlled by Mr. Kang. Nanjing Knitting has sold their knitting underwear on consignment in some Company’s retail stores since the third quarter of 2015. During the three months ended March 31, 2018 and 2017, the Company received $0 and $5,381 from the customers and paid $0 and $8,959 to Nanjing Knitting through the consignment, respectively. The net loss of $0 and $3,576 was recorded as other income during the three months ended March 31, 2018 and 2017 Other expenses due to Related Parties Included in other expenses for the three months ended March 31, 2018 and 2017 are rent costs due to entities controlled by Mr. Kang under operating lease agreements as follows: 2018 2017 (In thousands of Jiangsu Ever-Glory $ - $ 11 Chuzhou Huarui 58 52 Kunshan Enjin 13 11 Total $ 71 $ 74 The Company leases Jiangsu Ever-Glory's factory as the factory is in a location where there is a good supply of experienced workers. The Company leases Chuzhou Huarui and Kunshan Enjin's warehouse spaces because the locations are convenient for transportation and distribution. Purchases from and Sub-contracts with Related Parties The Company purchased raw materials from Nanjing Knitting totaling $0.33 million and $0.16 million during the three months ended March 31, 2018 and 2017, respectively. In addition, the Company sub-contracted certain manufacturing work to related companies totaling $3.7 million and $3.4 million for the three months ended March 31, 2018 and 2017, respectively. The Company provided raw materials to the sub-contractors and charged a fixed fee for labor provided by the sub-contractors. Sub-contracts with related parties included in cost of sales for the three months ended March 31, 2018 and 2017 are as follows: 2018 2017 (In thousands of Ever-Glory Vietnam $ 1,914 $ 1,422 Chuzhou Huarui 867 1,010 Fengyang Huarui 484 464 Ever-Glory Cambodia - 36 Nanjing Ever-Kyowa 349 445 EsC'eLav - 4 Jiangsu Ever-Glory 45 3 Total $ 3,659 $ 3,384 Accounts Payable – Related Parties The accounts payable to related parties at March 31, 2018 and December 31, 2017 are as follows: 2018 2017 (In thousands of Ever-Glory Vietnam $ 1,638 1,934 Fengyang Huarui 382 459 Nanjing Ever-Kyowa 888 900 Chuzhou Huarui 686 1,152 Nanjing Knitting 399 114 Esc’elav 6 6 Jiangsu Ever-Glory 53 110 Total $ 4,052 $ 4,675 Amounts Due From Related Parties-current assets The amounts due from related parties at March 31, 2018 and December 31, 2017 are as follows: 2018 2017 (In thousands of Jiangsu Ever-Glory $ 248 $ 265 Total $ 248 $ 265 Jiangsu Ever-Glory is an entity engaged in importing/exporting, apparel-manufacture, real-estate development, car sales and other activities. Jiangsu Ever-Glory is controlled by Mr. Kang. During three months ended March 31, 2018 and 2017, the Company and Jiangsu Ever-Glory purchased raw materials on behalf of each other in order to obtain cheaper purchase prices. The Company purchased raw materials on Jiangsu Ever-Glory’s behalf and sold to Jiangsu Ever-Glory at cost for $0.3 million and $0.7 million during the three month period ended March 31, 2018 and 2017, respectively. Jiangsu Ever-Glory purchased raw materials on the Company’s behalf and sold to the Company at cost for $22,235 and $0 during the three months ended March 31, 2018 and 2017, respectively. Amounts Due From Related Party under Counter Guarantee Agreement In March 2012, in consideration of the guarantees and collateral provided by Jiangsu Ever-Glory and Nanjing Knitting, the Company agreed to provide Jiangsu Ever-Glory a counter guarantee in the form of cash of not less than 70% of the maximum aggregate lines of credit obtained by the Company. Jiangsu Ever-Glory is obligated to return the full amount of the counter-guarantee funds provided upon expiration or termination of the underlying lines of credit and is to pay annual interest at the rate of 6.0% of amounts provided. As of March 31, 2018 and December 31, 2017, Jiangsu Ever-Glory has provided guarantees for approximately $51.3 million (RMB 322 million) and $49.5 million (RMB 322.0 million) of lines of credit obtained by the Company, respectively. Jiangsu Ever-Glory and Nanjing Knitting have also provided their assets as collateral for certain of these lines of credit. The value of the collateral, as per appraisals obtained by the banks in connection with these lines of credit is approximately $32.7 million (RMB 205.5 million) and $31.6 million (RMB 205.5 million) as of March 31, 2018 and December 31, 2017, respectively. Mr. Kang has also provided a personal guarantee for $22.3 million (RMB 140.0 million) and $21.5 million (RMB 140.0 million) as of March 31, 2018 and December 31, 2017, respectively. At December 31, 2017, $12.8 million (RMB 83.6 million) was outstanding due from Jiangsu Ever-Glory under the counter guarantee agreement. During the three months ended March 31, 2018, an additional $7.7 million (RMB 48.9 million) was provided to Jiangsu Ever-Glory under the counter-guarantee. As of March 31, 2018, the amount of the counter-guarantee was $21.1 million (RMB 132.5 million) (the difference represents currency exchange adjustment of $0.5 million), which was 44.2% of the aggregate amount of lines of credit. The increase of the percentage in this quarter was mainly due to China’s credit tightening policy. Obtaining bank loan requires a higher guarantee deposit in this quarter. This amount plus accrued interest of $2.8 million have been classified as a reduction of equity, consistent with the guidance of SEC Staff Accounting Bulletins 4E and 4G. At March 31, 2018 and December 31, 2017, the amount classified as a reduction of equity was $23.9 million and $15.4 million, respectively. Interest of 0.5% is charged on net amounts due from Jiangsu Ever-Glory at each month end. Since April 1, 2015, interest rate has changed to 0.41% as the bank benchmark interest rate decreased. Interest income for the three months ended March 31, 2018 and 2017 was approximately $0.2 million and $0.1 million, respectively. |
Concentrations and Risks
Concentrations and Risks | 3 Months Ended |
Mar. 31, 2018 | |
Concentrations and Risks [Abstract] | |
CONCENTRATIONS AND RISKS | NOTE 10 CONCENTRATIONS AND RISKS The Company extends unsecured credit to its customers in the normal course of business and generally does not require collateral. As a result, management performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and its aging analysis. Based on management’s assessment of the amount of probable credit losses, if any, in existing accounts receivable, the allowance for doubtful accounts at March 31, 2018 and December 31, 2017 was $5.1 million and $5.2 million, respectively. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of accounts receivable. In the analysis, management primarily considers the age of the customer’s receivable and also considers the credit worthiness of the customer, the economic conditions of the customer’s industry, and general economic conditions and trends, among other factors. If any of these factors change, the Company may also change its original estimates, which could impact the level of the Company’s future allowance for doubtful accounts. If judgments regarding the collectability of accounts receivables are incorrect, adjustments to the allowance may be required, which would reduce profitability. For the three-month period ended March 31, 2018, the Company had one wholesale customer that represented approximately 18% of the Company’s revenues. For the three-month period ended March 31, 2017, the Company had two wholesale customers that represented approximately 12% and 11% of the Company’s revenues. For the wholesale business, the Company did not rely on any one raw material supplier that represented more than 10% of the total raw material purchases during the three months ended March 31, 2018 and 2017. For the retail business, the Company relied on two raw material suppliers that represented approximately 30% and 23% of raw material purchases during the three months ended March 31, 2018. The Company relied on two raw material suppliers that represented approximately 27% and 16% of raw material purchases during the three months ended March 31, 2017. For the wholesale business, during the three months ended March 31, 2018, the Company relied on one manufacturer that represented 14% of finished goods purchases, and during the three months ended March 31, 2017, the Company relied on one manufacturer that represented 12% of finished goods purchases. For the retail business, the Company did not rely on any one supplier that represented more than 10% of the total finished goods purchases during the three months ended March 31, 2018 and 2017. The Company’s revenues for the three months ended March 31, 2018 and 2017 were earned in the following geographic areas: 2018 2017 (In thousands of Mainland China $ 4,211 $ 6,591 Hong Kong China 5,138 5,422 Germany 1,866 2,892 United Kingdom 2,218 3,288 Europe-Other 4,453 5,749 Japan 2,436 1,445 United States 4,934 2,918 Total wholesale business 25,256 28,305 Retail business 67,529 56,815 Total $ 92,785 $ 85,120 |
Segments
Segments | 3 Months Ended |
Mar. 31, 2018 | |
Segments [Abstract] | |
SEGMENTS | NOTE 11 SEGMENTS The Company reports financial and operating information in the following two segments: (a) Wholesale segment (b) Retail segment Wholesale Retail Total (In thousands of U.S. Dollars) As of and for the period ended March 31, 2018 Segment profit or loss: Net revenue from external customers $ 25,256 67,529 92,785 Income from operations $ 1,096 350 1,446 Interest income $ 309 17 326 Interest expense $ 490 74 564 Depreciation and amortization $ 305 2,232 2,537 Income tax expense $ 234 523 757 Segment assets: Additions to property, plant and equipment 482 2,070 2,552 Total assets 86,526 134,988 221,514 As of and for the period ended March 31, 2017 Segment profit or loss: Net revenue from external customers $ 28,305 56,815 85,120 Income from operations $ 1,751 (242 ) 1,509 Interest income $ 236 21 257 Interest expense $ 245 82 327 Depreciation and amortization $ 267 1,974 2,241 Income tax expense $ 464 753 1,217 Segment assets: Additions to property, plant and equipment 86 1,123 1,209 Total assets 78,444 105,696 184,140 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 SUBSEQUENT EVENTS As of May 14, 2018, there is no material subsequent event to be disclosed. |
Significant Accounting Polici18
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Significant Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue from Contracts with Customers The Company operates in two segments – wholesale and retail. The Company recognizes wholesale revenue when a sales order is obtained or a sales contract is entered (i & ii), sales price net of value-added taxes is determined (iii & iv), and title is passed to the customer upon delivery for local sales or upon shipment of the products for export sales (v). The Company recognizes retail revenue when a sales order is obtained (i & ii), sales price net of promotional discounts, rebates, and return allowances is determined (iii & iv), and at the time of the register receipt and the product is picked up by the customer in the retail store (v). Retail online sales revenue is consistent with above (i) to (iv) but recognized when the customer receives the product (v), since we retain a portion of the risk of loss on these sales during transit. |
Financial Instruments | Financial Instruments Management has estimated that the carrying amounts of non-related party financial instruments approximate their fair values due to their short-term maturities. The fair value of amounts due from (to) related parties is not practicable to estimate due to the related party nature of the underlying transactions. |
Accounts Receivable | Accounts Receivable The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management’s assessment of the credit history of its customers and current relationships with them. The Company writes off accounts receivable when amounts are deemed uncollectible. |
Fair Value Accounting | Fair Value Accounting Accounting Standards Codification (“ASC”) 820 “ Fair Value Measurements and Disclosures 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). At March 31, 2018, the Company’s financial assets (all Level 1) consist of cash placed with financial institutions that management considers to be of a high quality. As of March 31, 2018, the Company has three derivative liability subjects to recurring fair value measurement (Level 3) with the change in fair value recognized in earnings (Note 5). The Company has adopted ASC 825-10 “ Financial Instruments |
Foreign Currency Translation and Other Comprehensive Income | Foreign Currency Translation and Other Comprehensive Income The reporting currency of the Company is the U.S. dollar. The functional currency of Ever-Glory, Perfect Dream, Ever-Glory HK and Ever-Glory Supply Chain is the U.S. dollar. The functional currency of Goldenway, New Tailun, Catch-luck, Ever-Glory Apparel, Shanghai LA GO GO, Jiangsu LA GO GO, Tianjin LA GO GO, Shanghai Yiduo, Ya Lan, He Meida, Huirui and Taixin is the Chinese RMB. For subsidiaries whose functional currency is the RMB, all assets and liabilities were translated at the exchange rate at the balance sheet date; equity was translated at historical rates and items in the statement of comprehensive income were translated at the average rate for the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income. The resulting translation gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Items in the cash flow statement are translated at the average exchange rate for the period. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventories [Abstract] | |
Schedule of inventories | March 31, December 31, (In thousands of Raw materials $ 6,078 $ 2,148 Work-in-progress 12,075 8,852 Finished goods 38,445 45,182 Total inventories $ 56,598 $ 56,182 |
Bank Loans (Tables)
Bank Loans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Bank Loans [Abstract] | |
Schedule of short-term bank loans | March 31, December 31, Bank (In thousands of Industrial and Commercial Bank of China $ 22,288 $ 21,504 Nanjing Bank 11,144 9,216 Bank of Communications 1,592 1,536 China Minsheng Bank 3,184 3,072 Bank of China 1,592 - HSBC 1,820 2,402 $ 41,620 $ 37,730 |
Income Tax (Tables)
Income Tax (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax [Abstract] | |
Summary of pre-tax income in jurisdictions | 2018 2017 (In thousands of PRC $ 1,349 $ 2,019 BVI (3 ) - Others (2 ) (3 ) $ 1,344 $ 2,016 |
Summary of reconciliation of PRC statutory rates to the Company's effective tax rate | 2018 2017 PRC statutory rate 25.0 % 25.0 % Net operating losses for which no deferred tax assets was recognized 31.3 35.4 Effective income tax rate 56.3 % 60.4 % |
Schedule of income tax expense | 2018 2017 (In thousands of Current $ 925 $ 2,371 Deferred (168 ) (1,154 ) Income tax expense $ 757 $ 1,217 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of demonstrates calculation for earnings per share | 2018 2017 Weighted average number of common shares- Basic and diluted 14,795,992 14,789,626 Earnings per share - basic and diluted $ 0.06 $ 0.07 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Summary of other expenses due to related parties | 2018 2017 (In thousands of Jiangsu Ever-Glory $ - $ 11 Chuzhou Huarui 58 52 Kunshan Enjin 13 11 Total $ 71 $ 74 |
Summary of sub-contracts with related parties | 2018 2017 (In thousands of Ever-Glory Vietnam $ 1,914 $ 1,422 Chuzhou Huarui 867 1,010 Fengyang Huarui 484 464 Ever-Glory Cambodia - 36 Nanjing Ever-Kyowa 349 445 EsC'eLav - 4 Jiangsu Ever-Glory 45 3 Total $ 3,659 $ 3,384 |
Summary of accounts payable to related parties | 2018 2017 (In thousands of Ever-Glory Vietnam $ 1,638 1,934 Fengyang Huarui 382 459 Nanjing Ever-Kyowa 888 900 Chuzhou Huarui 686 1,152 Nanjing Knitting 399 114 Esc’elav 6 6 Jiangsu Ever-Glory 53 110 Total $ 4,052 $ 4,675 |
Summary of amounts due from related party current assets | 2018 2017 (In thousands of Jiangsu Ever-Glory $ 248 $ 265 Total $ 248 $ 265 |
Concentrations and Risks (Table
Concentrations and Risks (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Concentrations and Risks [Abstract] | |
Schedule of Company's revenues as per geographic areas | 2018 2017 (In thousands of Mainland China $ 4,211 $ 6,591 Hong Kong China 5,138 5,422 Germany 1,866 2,892 United Kingdom 2,218 3,288 Europe-Other 4,453 5,749 Japan 2,436 1,445 United States 4,934 2,918 Total wholesale business 25,256 28,305 Retail business 67,529 56,815 Total $ 92,785 $ 85,120 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segments [Abstract] | |
Summary of financial and operating information | Wholesale Retail Total (In thousands of U.S. Dollars) As of and for the period ended March 31, 2018 Segment profit or loss: Net revenue from external customers $ 25,256 67,529 92,785 Income from operations $ 1,096 350 1,446 Interest income $ 309 17 326 Interest expense $ 490 74 564 Depreciation and amortization $ 305 2,232 2,537 Income tax expense $ 234 523 757 Segment assets: Additions to property, plant and equipment 482 2,070 2,552 Total assets 86,526 134,988 221,514 As of and for the period ended March 31, 2017 Segment profit or loss: Net revenue from external customers $ 28,305 56,815 85,120 Income from operations $ 1,751 (242 ) 1,509 Interest income $ 236 21 257 Interest expense $ 245 82 327 Depreciation and amortization $ 267 1,974 2,241 Income tax expense $ 464 753 1,217 Segment assets: Additions to property, plant and equipment 86 1,123 1,209 Total assets 78,444 105,696 184,140 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of inventories | ||
Raw materials | $ 6,078 | $ 2,148 |
Work-in-progress | 12,075 | 8,852 |
Finished goods | 38,445 | 45,182 |
Total inventories | $ 56,598 | $ 56,182 |
Bank Loans (Details)
Bank Loans (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of short term bank loans | ||
Bank loans | $ 41,620 | $ 37,730 |
Industrial and Commercial Bank of China [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 22,288 | 21,504 |
Nanjing Bank [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 11,144 | 9,216 |
HSBC [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 1,820 | 2,402 |
Bank of Communications [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 1,592 | 1,536 |
China Minsheng Banking [Member[ | ||
Schedule of short term bank loans | ||
Bank loans | 3,184 | 3,072 |
Bank of China [Member] | ||
Schedule of short term bank loans | ||
Bank loans | $ 1,592 |
Bank Loans (Details Textual)
Bank Loans (Details Textual) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Sep. 30, 2017USD ($) | Sep. 30, 2017CNY (¥) | Jul. 31, 2017USD ($) | Jul. 31, 2017CNY (¥) | Mar. 31, 2017CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Oct. 31, 2016USD ($) | Oct. 31, 2016CNY (¥) | Jun. 30, 2016USD ($) | Jun. 30, 2016CNY (¥) | Sep. 30, 2015USD ($) | Sep. 30, 2015CNY (¥) | Jun. 30, 2014USD ($) | Jun. 30, 2014CNY (¥) | |
Bank Loans (Textual) | ||||||||||||||||||||
Interest expense on bank loans | $ 300,000 | $ 600,000 | ||||||||||||||||||
Nanjing Bank [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit annual interest rates | 2.40% | |||||||||||||||||||
Due date of revolving line of credit agreement | October 2,017 | |||||||||||||||||||
Nanjing Bank [Member] | Goldenway [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit agreement amount | $ 1,600,000 | ¥ 10,000 | $ 8,000,000 | ¥ 50,000,000 | ||||||||||||||||
Unused line of credit | $ 6,400,000 | |||||||||||||||||||
Due date of revolving line of credit agreement | May to October 2018. | |||||||||||||||||||
Nanjing Bank [Member] | Goldenway [Member] | Minimum [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Interest expense on bank loans | $ 4,370 | |||||||||||||||||||
Nanjing Bank [Member] | Goldenway [Member] | Maximum [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Interest expense on bank loans | 4,540 | |||||||||||||||||||
Nanjing Bank [Member] | Ever-Glory Apparel [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit agreement amount | 8,000,000 | 50,000,000 | $ 9,600,000 | ¥ 60,000,000 | ||||||||||||||||
Unused line of credit | $ 1,600,000 | |||||||||||||||||||
Due date of revolving line of credit agreement | April to September 2018. | |||||||||||||||||||
Nanjing Bank [Member] | Ever-Glory Apparel [Member] | Minimum [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit annual interest rates | 4.60% | |||||||||||||||||||
Nanjing Bank [Member] | Ever-Glory Apparel [Member] | Maximum [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit annual interest rates | 4.70% | |||||||||||||||||||
Nanjing Bank [Member] | LA GO GO [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit agreement amount | $ 3,200,000 | ¥ 20,000,000 | ||||||||||||||||||
Unused line of credit | $ 1,600,000 | 10,000,000 | ||||||||||||||||||
Line of credit annual interest rates | 5.00% | |||||||||||||||||||
Due date of revolving line of credit agreement | May 2,018 | |||||||||||||||||||
Accounts receivable from our wholesale customers | $ 1,600,000 | 10,000,000 | ||||||||||||||||||
Industrial and Commercial Bank of China [Member] | Goldenway [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit agreement amount | 6,400,000 | 40,000,000 | $ 9,600,000 | ¥ 60,000,000 | ||||||||||||||||
Unused line of credit | $ 3,000,000 | |||||||||||||||||||
Line of credit annual interest rates | 4.70% | |||||||||||||||||||
Due date of revolving line of credit agreement | January to November 2018 | |||||||||||||||||||
Industrial and Commercial Bank of China [Member] | Ever-Glory Apparel [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit agreement amount | $ 15,900,000 | 100,000,000 | $ 19,100,000 | ¥ 120,000,000 | ||||||||||||||||
Unused line of credit | $ 3,200,000 | |||||||||||||||||||
Due date of revolving line of credit agreement | April to September 2018. | |||||||||||||||||||
Industrial and Commercial Bank of China [Member] | Ever-Glory Apparel [Member] | Minimum [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit annual interest rates | 4.57% | |||||||||||||||||||
Industrial and Commercial Bank of China [Member] | Ever-Glory Apparel [Member] | Maximum [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit annual interest rates | 4.70% | |||||||||||||||||||
China Everbright Bank [Member] | Ever-Glory Apparel [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit agreement amount | $ 6,400,000 | ¥ 40,000 | ||||||||||||||||||
Unused line of credit | $ 6,400,000 | |||||||||||||||||||
Bank of Communications [Member] | LA GO GO [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit agreement amount | 1,600,000 | 10,000 | $ 3,500,000 | ¥ 22,000 | $ 4,900,000 | ¥ 33,000,000 | ||||||||||||||
Unused line of credit | $ 1,900,000 | |||||||||||||||||||
Line of credit annual interest rates | 4.57% | |||||||||||||||||||
Due date of revolving line of credit agreement | September 2,018 | |||||||||||||||||||
Bank of China [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Unused line of credit | $ 1,600,000 | |||||||||||||||||||
Line of credit annual interest rates | 1.70% | |||||||||||||||||||
Due date of revolving line of credit agreement | October 2,017 | |||||||||||||||||||
Bank of China [Member] | Ever-Glory Apparel [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit agreement amount | $ 1,600,000 | 10,000,000 | $ 4,800,000 | ¥ 30,000,000 | ||||||||||||||||
Unused line of credit | $ 3,200,000 | |||||||||||||||||||
Line of credit annual interest rates | 4.35% | |||||||||||||||||||
Due date of revolving line of credit agreement | August 2,018 | |||||||||||||||||||
HSBC [Member] | Ever-Glory Apparel [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit agreement amount | $ 2,100,000 | $ 2,500,000 | ||||||||||||||||||
Unused line of credit | $ 700,000 | |||||||||||||||||||
Line of credit annual interest rates | 3.00% | |||||||||||||||||||
Due date of revolving line of credit agreement | October 2,018 | |||||||||||||||||||
China Minsheng Bank [Member] | LA GO GO [Member] | ||||||||||||||||||||
Bank Loans (Textual) | ||||||||||||||||||||
Line of credit agreement amount | $ 3,200,000 | ¥ 20,000,000 | $ 3,200,000 | ¥ 20,000,000 | ||||||||||||||||
Line of credit annual interest rates | 4.60% | |||||||||||||||||||
Due date of revolving line of credit agreement | June 2,018 |
Derivative Liability (Details)
Derivative Liability (Details) € in Thousands | Mar. 31, 2018EUR (€)ForeignExchangeContracts | Dec. 31, 2017EUR (€) |
Derivative Liability (Textual) | ||
Derivative notional amount | € | € 1,290 | € 1,680 |
Number of foreign exchange contracts | ForeignExchangeContracts | 2 |
Income Tax (Details)
Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Summary of Pre-tax income in jurisdictions | ||
Pre-tax income | $ 1,344 | $ 2,016 |
PRC [Member] | ||
Summary of Pre-tax income in jurisdictions | ||
Pre-tax income | 1,349 | 2,019 |
BVI [Member] | ||
Summary of Pre-tax income in jurisdictions | ||
Pre-tax income | (3) | |
Others [Member] | ||
Summary of Pre-tax income in jurisdictions | ||
Pre-tax income | $ (2) | $ (3) |
Income Tax (Details 1)
Income Tax (Details 1) - PRC [Member] | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Summary of reconciliation of PRC statutory rates to the company's effective tax rate | ||
PRC statutory rate | 25.00% | 25.00% |
Net operating losses for which no deferred tax assets was recognized | 31.30% | 35.40% |
Effective income tax rate | 56.30% | 60.40% |
Income Tax (Details 2)
Income Tax (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Summary of income tax expense | ||
Current | $ 925 | $ 2,371 |
Deferred | (168) | (1,154) |
Income tax expense | $ 757 | $ 1,217 |
Income Tax (Details Textual)
Income Tax (Details Textual) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax (Textual) | ||
Tax Expiration | Dec. 31, 2017 | |
Income tax, description | The statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017. | |
Xizang (Tibet) [Member] | ||
Income Tax (Textual) | ||
PRC statutory rate | 15.00% | |
Non-U.S. subsidiaries [Member] | ||
Income Tax (Textual) | ||
U.S. deferred income taxes | $ 96 | |
Minimum [Member] | ||
Income Tax (Textual) | ||
Effective income tax reduction, percent | 9.00% | |
Maximum [Member] | ||
Income Tax (Textual) | ||
Effective income tax reduction, percent | 15.00% | |
PRC [Member] | ||
Income Tax (Textual) | ||
PRC statutory rate | 25.00% | 25.00% |
Income tax rate for dividends distribution | 10.00% | |
HK [ Member] | ||
Income Tax (Textual) | ||
PRC statutory rate | 16.50% |
Earnings Per Share (Details)
Earnings Per Share (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Basic and diluted earnings per share | ||
Weighted average number of common shares - Basic and diluted | 14,795,992 | 14,789,626 |
Earnings per share - Basic and diluted | $ 0.06 | $ 0.07 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | 1 Months Ended | |
Oct. 19, 2017 | Feb. 28, 2017 | |
Two independent directors [Member] | ||
Stockholders' Equity (Textual) | ||
Common stock shares issued to independent directors | 2,542 | |
Common stock issued at five days average market price | $ 1.96 | |
Number of days used to calculation average market price of common stock | Five days before the grant date. | |
Two independent directors one [Member] | ||
Stockholders' Equity (Textual) | ||
Common stock shares issued to independent directors | 3,156 | 2,354 |
Common stock issued at five days average market price | $ 2.37 | $ 2.14 |
Number of days used to calculation average market price of common stock | five days before the grant date. | Five days before the grant date. |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Summary of other expenses due to related parties | ||
Total | $ 71 | $ 74 |
Jiangsu Ever-Glory [Member] | ||
Summary of other expenses due to related parties | ||
Total | 11 | |
Chuzhou Huarui [Member] | ||
Summary of other expenses due to related parties | ||
Total | 58 | 52 |
Kunshan Enjin [Member] | ||
Summary of other expenses due to related parties | ||
Total | $ 13 | $ 11 |
Related Party Transactions (D37
Related Party Transactions (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Summary of sub-contracts with related parties | ||
Total | $ 3,659 | $ 3,384 |
Chuzhou Huarui [Member] | ||
Summary of sub-contracts with related parties | ||
Total | 867 | 1,010 |
Fengyang Huarui [Member] | ||
Summary of sub-contracts with related parties | ||
Total | 484 | 464 |
Nanjing Ever-Kyowa [Member] | ||
Summary of sub-contracts with related parties | ||
Total | 349 | 445 |
Ever-Glory Vietnam [Member] | ||
Summary of sub-contracts with related parties | ||
Total | 1,914 | 1,422 |
Ever-Glory Cambodia [Member] | ||
Summary of sub-contracts with related parties | ||
Total | 36 | |
EsC'eLav [Member] | ||
Summary of sub-contracts with related parties | ||
Total | 4 | |
Jiangsu Ever-Glory [Member] | ||
Summary of sub-contracts with related parties | ||
Total | $ 45 | $ 3 |
Related Party Transactions (D38
Related Party Transactions (Details 2) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Summary of accounts payable - related parties | ||
Total | $ 4,052 | $ 4,675 |
Ever-Glory Vietnam [Member] | ||
Summary of accounts payable - related parties | ||
Total | 1,638 | 1,934 |
Fengyang Huarui [Member] | ||
Summary of accounts payable - related parties | ||
Total | 382 | 459 |
Nanjing Ever-Kyowa [Member] | ||
Summary of accounts payable - related parties | ||
Total | 888 | 900 |
Chuzhou Huarui [Member] | ||
Summary of accounts payable - related parties | ||
Total | 686 | 1,152 |
Jiangsu Ever-Glory [Member] | ||
Summary of accounts payable - related parties | ||
Total | 53 | 110 |
EsC'eLav [Member] | ||
Summary of accounts payable - related parties | ||
Total | 6 | 6 |
Nanjing Knitting [Member] | ||
Summary of accounts payable - related parties | ||
Total | $ 399 | $ 114 |
Related Party Transactions (D39
Related Party Transactions (Details 3) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Summary of amounts due from related parties | ||
Total | $ 248 | $ 265 |
Jiangsu Ever-Glory [Member] | ||
Summary of amounts due from related parties | ||
Total | $ 248 | $ 265 |
Related Party Transactions (D40
Related Party Transactions (Details Textual) $ in Thousands, ¥ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2012 | Mar. 31, 2018USD ($) | Mar. 31, 2018CNY (¥) | Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Mar. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Related Party Transactions (Textual) | |||||||||
Net profit (loss) | $ 815 | $ 974 | |||||||
Ever-Glory Enterprises [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Acquired interest | 83.00% | 83.00% | |||||||
Jiangsu Ever-Glory [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Purchase of raw material | $ 300 | 700 | |||||||
Company sold raw materials | 22,235 | 0 | |||||||
Minimum percentage counter-guaranty on lines of credit | 70.00% | ||||||||
Line of credit facility, Interest rate at expiration or termination | 6.00% | ||||||||
Guarantee on lines of credit | 51,300 | ¥ 322 | $ 49,500 | ¥ 322 | |||||
Counter guaranty provided by parent company on lines of credit | 7,700 | 12,800 | ¥ 48.9 | ¥ 83.6 | |||||
Accrued interest | 1,900 | ||||||||
Value of equity reduction | $ 23,900 | 15,400 | |||||||
Interest charged on net amounts due | 0.50% | 0.50% | |||||||
Bank interest rate | 0.41% | 0.41% | |||||||
Interest income payable to related party | $ 200 | $ 200 | 500 | ||||||
Jiangsu Ever-Glory [Member] | Counter-guarantee [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Amount of Guarantee reduced | 21,100 | ¥ 132.5 | |||||||
Currency exchange adjustment | $ 600 | ||||||||
Percentage of reduced guarantee | 44.20% | 44.20% | |||||||
Nanjing Knitting [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Other income from related parties | 5,381 | ||||||||
Amount paid through the consignment | 8,959 | ||||||||
Net profit (loss) | 3,576 | ||||||||
Purchase of raw material | 330 | 160 | |||||||
Line of credit facility, collateral amount | 32,700 | ¥ 205.5 | 31,600 | 205.5 | |||||
Mr. Kang [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Guarantee on lines of credit | 22,300 | ¥ 140 | $ 21,500 | ¥ 140 | |||||
Jiangsu Wubijia [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Other income from related parties | 33,622 | 11,565 | |||||||
Amount paid through the consignment | 19,188 | 8,954 | |||||||
Net profit (loss) | $ 14,435 | $ 2,611 |
Concentrations and Risks (Detai
Concentrations and Risks (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues earned in geographic areas | ||
Revenues | $ 92,785 | $ 85,120 |
Total wholesale business [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 25,256 | 28,305 |
Retail business [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 67,529 | 56,815 |
Mainland China [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 4,211 | 6,591 |
Hong Kong, China [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 5,138 | 5,422 |
Germany [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 1,866 | 2,892 |
United Kingdom [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 2,218 | 3,288 |
Europe-Other [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 4,453 | 5,749 |
Japan [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 2,436 | 1,445 |
United States [Member] | ||
Revenues earned in geographic areas | ||
Revenues | $ 4,934 | $ 2,918 |
Concentrations and Risks (Det42
Concentrations and Risks (Details Textual) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)CustomerSupplier | Mar. 31, 2017CustomerSupplier | Dec. 31, 2017USD ($) | |
Concentrations and Risks (Textual) | |||
Allowance for doubtful accounts | $ | $ 5.1 | $ 5.2 | |
Wholesale business customer [Member] | Revenues [Member] | |||
Concentrations and Risks (Textual) | |||
Concentration risk, percentage | 18.00% | 12.00% | |
Number of wholesale customer | Customer | 2 | 2 | |
Wholesale business customer [Member] | Raw materials [Member] | |||
Concentrations and Risks (Textual) | |||
Concentration risk, percentage | 10.00% | 10.00% | |
Wholesale business customer [Member] | Finished goods [Member] | |||
Concentrations and Risks (Textual) | |||
Concentration risk, percentage | 10.00% | 10.00% | |
Wholesale business customer one [Member] | Revenues [Member] | |||
Concentrations and Risks (Textual) | |||
Concentration risk, percentage | 18.00% | 11.00% | |
Retail business [Member] | Raw material suppliers [Member] | |||
Concentrations and Risks (Textual) | |||
Concentration risk, percentage | 30.00% | 27.00% | |
Number of raw material suppliers | Supplier | 2 | 2 | |
Retail Business One [Member] | Raw materials [Member] | |||
Concentrations and Risks (Textual) | |||
Concentration risk, percentage | 23.00% | 16.00% |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Segment profit or loss: | |||
Net revenue from external customers | $ 92,785 | $ 85,120 | |
Income (Loss) from operations | 1,446 | 1,509 | |
Interest income | 326 | 257 | |
Interest expense | 564 | 327 | |
Depreciation and amortization | 2,537 | 2,241 | |
Income tax expense | 757 | 1,217 | |
Segment assets: | |||
Additions to property, plant and equipment | 2,552 | 1,209 | |
Total assets | 221,514 | 184,140 | $ 244,992 |
Wholesale segment [Member] | |||
Segment profit or loss: | |||
Net revenue from external customers | 25,256 | 28,305 | |
Income (Loss) from operations | 1,096 | 1,751 | |
Interest income | 309 | 236 | |
Interest expense | 490 | 245 | |
Depreciation and amortization | 305 | 267 | |
Income tax expense | 234 | 464 | |
Segment assets: | |||
Additions to property, plant and equipment | 482 | 86 | |
Total assets | 86,526 | 78,444 | |
Retail segment [Member] | |||
Segment profit or loss: | |||
Net revenue from external customers | 67,529 | 56,815 | |
Income (Loss) from operations | 350 | (242) | |
Interest income | 17 | 21 | |
Interest expense | 74 | 82 | |
Depreciation and amortization | 2,232 | 1,974 | |
Income tax expense | 523 | 753 | |
Segment assets: | |||
Additions to property, plant and equipment | 2,070 | 1,123 | |
Total assets | $ 134,988 | $ 105,696 |
Segments (Details Textual)
Segments (Details Textual) | 3 Months Ended |
Mar. 31, 2018Segment | |
Segments (Textual) | |
Number of segments | 2 |