Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 25, 2019 | Jun. 29, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Ever-Glory International Group, Inc. | ||
Entity Central Index Key | 0000943184 | ||
Trading Symbol | EVK | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 14,100 | ||
Entity Common Stock, Shares Outstanding | 14,800,140 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 47,012 | $ 62,876 |
Accounts receivable, net | 86,527 | 81,859 |
Inventories | 65,929 | 56,182 |
Value added tax receivable | 2,580 | 3,757 |
Other receivables and prepaid expenses | 10,204 | 5,139 |
Advances on inventory purchases | 6,420 | 3,028 |
Amounts due from related parties | 192 | 265 |
Total Current Assets | 218,864 | 213,106 |
INTANGIBLE ASSETS | 4,962 | 5,995 |
PROPERTY AND EQUIPMENT, NET | 28,445 | 25,891 |
TOTAL ASSETS | 252,271 | 244,992 |
CURRENT LIABILITIES | ||
Bank loans | 29,497 | 37,730 |
Accounts payable | 78,412 | 73,788 |
Accounts payable and other payables - related parties | 4,756 | 4,675 |
Other payables and accrued liabilities | 21,958 | 16,454 |
Value added and other taxes payable | 2,569 | 6,052 |
Income tax payable | 1,569 | 1,712 |
Total Current Liabilities | 138,761 | 140,411 |
NONCURRENT LIABILITIES | ||
Deferred tax liabilities | 354 | 1,883 |
TOTAL LIABILITIES | 139,115 | 142,294 |
NOTE 13 COMMITMENTS AND CONTINGENCIES | ||
Stockholders' equity: | ||
Preferred stock ($0.001 par value, authorized 5,000,000 shares, no shares issued and outstanding) | ||
Common stock ($0.001 par value, authorized 50,000,000 shares, 14,798,198 and 14,795,992 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively) | 15 | 15 |
Additional paid-in capital | 3,627 | 3,620 |
Retained earnings | 105,914 | 95,195 |
Statutory reserve | 19,083 | 17,794 |
Accumulated other comprehensive income | (3,578) | 2,585 |
Amounts due from related party | (10,354) | (15,449) |
Total equity attributable to stockholders of the Company | 114,707 | 103,760 |
Noncontrolling interest | (1,551) | (1,062) |
Total Equity | 113,156 | 102,698 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 252,271 | $ 244,992 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 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 | 14,798,198 | 14,795,992 |
Common stock, shares outstanding | 14,798,198 | 14,795,992 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
SALES | $ 448,508 | $ 415,581 |
COST OF SALES | 301,153 | 279,839 |
GROSS PROFIT | 147,355 | 135,742 |
OPERATING EXPENSES | ||
Selling expenses | 91,439 | 85,940 |
General and administrative expenses | 39,811 | 35,053 |
Marketing related intangible asset impairment | 1,086 | |
Total operating expenses | 132,336 | 120,993 |
INCOME FROM OPERATIONS | 15,019 | 14,749 |
OTHER INCOME (EXPENSE) | ||
Interest income | 1,375 | 1,260 |
Interest expense | (1,989) | (1,648) |
Other income | 1,977 | 3,509 |
Total other income | 1,363 | 3,121 |
INCOME BEFORE INCOME TAX EXPENSE | 16,382 | 17,870 |
INCOME TAX EXPENSE | (4,942) | (5,805) |
NET INCOME | 11,440 | 12,065 |
Net loss attributable to the non-controlling interest | 568 | 394 |
NET INCOME ATTRIBUTABLE TO THE COMPANY | 12,008 | 12,459 |
NET INCOME | 11,440 | 12,065 |
Foreign currency translation gain | (6,163) | 5,882 |
COMPREHENSIVE INCOME | 5,277 | 17,947 |
Comprehensive loss attributable to the noncontrolling interest | 79 | 450 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY | $ 5,198 | $ 18,397 |
EARNINGS PER SHARE ATTRIBUTABLE TO THE COMPANY'S STOCKHOLDERS: | ||
Basic and diluted | $ 0.81 | $ 0.84 |
Weighted average number of shares outstanding Basic and diluted | 14,796,947 | 14,795,992 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Common Stock | Additional paid-in capital | Retained Earnings, Unrestricted | Retained Earnings, Statutory reserve | Accumulated other Comprehensive income | Amounts due from related party | Total equity attributable to stockholders of the Company | Non-controlling Interest | Total |
Balance at Dec. 31, 2016 | $ 15 | $ 3,602 | $ 83,423 | $ 17,107 | $ (3,297) | $ (15,936) | $ 84,914 | $ (612) | $ 84,302 |
Balance, shares at Dec. 31, 2016 | 14,787,940 | ||||||||
Stock issued for compensation | $ 8 | 18 | 18 | 18 | |||||
Stock issued for compensation, shares | 8,052 | ||||||||
Net income (loss) | 12,459 | 12,459 | (394) | 12,065 | |||||
Transfer to reserve | (687) | 687 | |||||||
Net cash paid to related party under counter guarantee agreement | 487 | 487 | 487 | ||||||
Foreign currency translation gain (loss) | 5,882 | 5,882 | (56) | 5,826 | |||||
Balance at Dec. 31, 2017 | $ 15 | 3,620 | 95,195 | 17,794 | 2,585 | (15,449) | 103,760 | (1,062) | 102,698 |
Balance, shares at Dec. 31, 2017 | 14,795,992 | ||||||||
Stock issued for compensation | $ 2 | 7 | 7 | 7 | |||||
Stock issued for compensation, shares | 2,206 | ||||||||
Net income (loss) | 12,008 | 12,008 | (568) | 11,440 | |||||
Transfer to reserve | (1,289) | 1,289 | |||||||
Net cash paid to related party under counter guarantee agreement | 5,095 | 5,095 | 5,095 | ||||||
Foreign currency translation gain (loss) | (6,163) | (6,163) | 79 | (6,084) | |||||
Balance at Dec. 31, 2018 | $ 15 | $ 3,627 | $ 105,914 | $ 19,083 | $ (3,578) | $ (10,354) | $ 114,707 | $ (1,551) | $ 113,156 |
Balance, shares at Dec. 31, 2018 | 14,798,198 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 11,440 | $ 12,065 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Intangible asset impairment loss | 1,086 | |
Depreciation and amortization | 6,664 | 7,015 |
Loss from sale of property and equipment | 108 | 24 |
Provision of bad debt allowance | 660 | 1,223 |
Provision for obsolete inventories | 3,324 | 4,624 |
Deferred income tax | (1,370) | (1,530) |
Stock-based compensation | 7 | 18 |
Changes in operating assets and liabilities | ||
Accounts receivable | (9,893) | (11,204) |
Inventories | (16,462) | (7,919) |
Value added tax receivable | 1,016 | (600) |
Other receivables and prepaid expenses | (5,659) | (1,136) |
Advances on inventory purchases | (3,698) | 307 |
Amounts due from related parties | (2,761) | (592) |
Accounts payable | 8,485 | 11,489 |
Accounts payable and other payables- related parties | 6,275 | 351 |
Other payables and accrued liabilities | 5,604 | 460 |
Value added and other taxes payable | (2,210) | 567 |
Income tax payable | (54) | (238) |
Net cash provided by operating activities | 2,562 | 14,924 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (12,182) | (8,564) |
Net cash used in investing activities | (12,182) | (8,564) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from bank loans | 64,006 | 62,693 |
Repayment of bank loans | (70,513) | (56,296) |
Repayment of loans from related party | 6,657 | 9,280 |
Advances to related party | (8,428) | (7,119) |
Interest income received from related party | 2,997 | |
Net cash provided by (used in) financing activities | (5,281) | 8,558 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (963) | 2,670 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (15,864) | 17,588 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 62,876 | 45,288 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 47,012 | 62,876 |
Cash paid during the period for: | ||
Accrued interest income on amounts due from related party under counter guarantee agreement (Note 12) | 738 | 818 |
Interest | 1,755 | 1,648 |
Income taxes | $ 6,350 | $ 6,247 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | NOTE 1 ORGANIZATION AND 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 following are the Company’s subsidiaries as of December 31, 2018: Perfect Dream Limited (“Perfect Dream”), a wholly-owned subsidiary of Ever-Glory, was incorporated in the British Virgin Islands in 2004. Ever-Glory International Group (HK) Ltd. (“Ever-Glory HK”), a wholly-owned subsidiary of Perfect Dream, was incorporated in Samoa in 2009. Ever-Glory HK is principally engaged in the import and export of apparel, fabric and accessories. Goldenway Nanjing Garments Co. Ltd. (“Goldenway”), a wholly-owned subsidiary of Perfect Dream, was incorporated in the PRC in 1993. Nanjing Catch-Luck Garments Co, Ltd. (“Catch-Luck”), a wholly-owned subsidiary of Perfect Dream, was incorporated in the PRC in 1995. Nanjing New-Tailun Garments Co. Ltd. (“New-Tailun’), a wholly-owned subsidiary of Perfect Dream, was incorporated in the PRC in 2006. Ever-Glory International Group Apparel Inc. (“Ever-Glory Apparel”), a wholly-owned subsidiary of Goldenway, was incorporated in the PRC in 2009. Shanghai LA GO GO Fashion Company Limited (“Shanghai LA GO GO”), a wholly-owned subsidiary of Ever-Glory Apparel, was incorporated in the PRC in 2008. Nanjing Tai Xin Garments Trading Company Limited (“Tai Xin”), a wholly-owned subsidiary of Ever-Glory Apparel, was incorporated in the PRC in 2012. Jiangsu LA GO GO Fashion Company Limited (“Jiangsu LA GO GO”), a joint venture of Ever-Glory Apparel and Catch-Luck, was incorporated in the PRC in 2013. Shanghai Ya Lan Fashion Company Limited (“Ya Lan”), a wholly-owned subsidiary of Shanghai LA GO GO, was incorporated in the PRC in 2014. Xizang He Meida Trading Company Limited (“He Meida”), a wholly-owned subsidiary of Ever-Glory Apparel, was incorporated in the PRC in 2014. Tianjin LA GO GO Fashion Company Limited (“Tianjin LA GO GO”), a joint venture of Ever-Glory Apparel and Catch-Luck, was incorporated in the PRC in 2014. ChuzhouHuirui Garments Co. Ltd. (“Huirui”), a wholly-owned subsidiary of Ever-Glory Apparel, was incorporated in the PRC in 2014. Shanghai LA GO GO acquired 78% of the shares of Shanghai Yiduo Fashion Company Limited (“Shanghai Yiduo”) in March 2015 (Note 4). Shanghai Yiduo was incorporated in the PRC in 2011. Ever-Glory Supply Chain Service Co., Limited (“Ever-Glory Supply Chain”), a wholly-owned subsidiary of Ever-Glory Apparel, was incorporated in Hongkong in 2017. Ever-Glory Supply Chain is principally engaged in the import and export of apparel, fabric and accessories. The Company’s wholesale operations are provided primarily through the Company’s PRC subsidiaries, Goldenway, Catch-Luck, New Tailun, Ever-Glory Apparel, TaiXin, Huirui, the Company’s Hongkong subsidiary, Ever-Glory Supply Chain and the Company’s Samoa subsidiary, Ever-Glory HK. The Company’s retail operations are provided through its subsidiaries, Shanghai LA GO GO, Jiangsu LA GO GO, Tianjin LA GO GO, Ya Lan, He Meida and 78% owned Shanghai Yiduo. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include Ever-Glory International Group, Inc. and its subsidiaries, and are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates and Assumptions In preparing the consolidated financial statements in conformity with GAAP, management makes certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the periods reported. Management believes that the estimates utilized in preparing the financial statements are reasonable and prudent based on the best information available at the time the estimates are made. Actual results could differ from these estimates. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and demand deposits with banks with original maturities within three months. Accounts Receivable, net 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. As of December 31, 2018 and 2017, $0.66 million and $1.2 million of bad debt expense have been made in the consolidated financial statements respectively. The allowance for doubtful account balances as of December 31, 2018 and 2017 are $5.9 million and $5.5 million, respectively. Inventories Wholesale inventories are stated at lower of cost or net realizable value, cost being determined on a specific identification method. The Company manufactures products upon receipt of orders from its customers. All products must pass the customers' quality assurance procedures before delivery. Therefore, products are rarely returned by customers after delivery. Retail inventories are stated at the lower of average cost or net realizable value, cost being determined on a specific identification method. The Company records a provision for slow-moving or obsolete materials and finished goods aged more than two years. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Expenditures for additions, major renewals and betterments are capitalized and expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided on a straight-line basis, less estimated residual value, over the assets' estimated useful lives. The estimated useful lives are as follows: Property and plant 15-20 Years Leasehold improvements 10 Months - 2 Years Machinery and equipment 5-10 Years Office equipment and furniture 3-5 Years Motor vehicles 5 Years Land Use Rights All land in the PRC is owned by the government and cannot be sold to any individual or company. However, the government may grant a "land use right" to occupy, develop and use land. The Company records land use rights obtained as intangible assets at cost, which is amortized evenly over the grant period of 50 years. Long-Lived Assets Long-lived assets, property, equipment and land use rights held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, when undiscounted future cash flows will not be sufficient to recover an asset's carrying amount, the asset is written down to its fair value. There were no impairments of long-lived assets as of December 31, 2018 and 2017. 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). The fair value of forward exchange contracts is based on broker quotes, if available. If broker quotes are not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price at the reporting date for the residual maturity of the contract using a risk-free interest rate based on government bonds. At December 31, 2018 and 2017, the Company's financial assets (all Level 1) consist of cash placed with financial institutions that management considers to be of a high quality. 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. As of December 31, 2018, the Company has the following derivative financial instruments measured at their fair value using Level 2 quoted prices provided by banks. The fair value of foreign currency swap contracts is determined by the variation of measurement date foreign exchange market rates and contract closing date predetermined foreign exchange rates. As of December 31, 2017, the Company has five derivative liability subjects to recurring fair value measurement (Level 3) with the change in fair value recognized in earnings. The Company has adopted ASC 825-10 " Financial Instruments Derivative Financial Instruments From time to time, the Company uses derivative financial instruments to manage its exposure to foreign currency risks arising from operational activities or on certain existing assets and liabilities. The Company does not hold or issue derivative instruments for trading purposes. The Company may enter into forward foreign exchange contracts, foreign exchange options, or foreign exchange currency swap contracts to manage exposure to certain foreign currency operating transactions. These instruments may offset a portion of the foreign currency re-measurement gains or losses, or changes in fair value. The Company may also enter into above similar derivative instruments to hedge the exposure to variability in the expected cash flows of forecasted transactions such as international sales or purchases that the Company expects to receive or commit to remit foreign currencies. In these cases, the Company designates these instruments as the cash flow hedges. Derivative financial instruments are recognized initially at fair value and transaction costs are expensed immediately. Subsequent to initial recognition, derivative financial instruments are stated at fair value. The gain or loss on re-measurement to fair value is recognized immediately in earnings when such instruments are designated as fair value hedges or ineffective portion of cash flow hedges. The accumulated gain or loss from effective portions of cash flow hedges are recorded in accumulated other comprehensive income/(loss) ("AOCI") until the hedged item is recognized in earnings. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. Revenue and Cost Recognition The Company recognizes wholesale revenue from product sales, net of value-added taxes, upon delivery for local sales and upon shipment of the products for export sales, at such time title passes to the customer. Retail sales are recorded net of promotional discounts, rebates, and return allowances. Retail store sales are recognized at the time of the register receipt. Retail online sales are recognized when products are shipped and customers receive the products because the Company retains a portion of the risk of loss on these sales during transit. The Company's revenue recognition policy is in compliance with ASC 606, Revenue from Contracts with Customers (i) identification of the promised goods and services in the contract; (ii) determination of whether the promised goods and services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon delivery for local sales and upon shipment of the products for export sale. For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules. Cost of goods sold includes the direct raw material cost, direct labor cost, manufacturing overheads including depreciation of production equipment, and rent and commission due to department stores consistent with the revenue earned. Cost of goods sold excludes warehousing costs, which historically have not been significant. Local transportation charges and production inspection charges are included in selling expenses and totaled $1.1 million and $0.8 million in the years ended December 31, 2018 and 2017, respectively. Research and Development Costs Research and development costs are expensed as incurred. Research and development costs included in general and administrative expenses for the years ended December 31, 2018 and 2017 amounted to $0.8 million and $1.07 million, respectively. Government subsidies Government subsidies are recognized when received and when all the conditions for their receipt have been met. Subsidies that compensate the Company for expenses incurred are recognized as a reduction of expenses in the consolidated statements of operations. Subsidies that are not associated with expenses are recognized as other income. Four of the Company's PRC subsidiaries received government subsidies of $1.19 million and $2.93 million for the years ended December 31, 2018 and 2017, respectively, which was recorded in other income when subsidies were received and all the conditions were met. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. The Company has adopted ASC 740 " Income Taxes The Company's policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company does not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the years ended December 31, 2018 and 2017. The Company's effective tax rate differs from the PRC statutory rate primarily due to non-deductible expenses, temporary differences, and preferential tax treatment. The Company files income tax returns with the relevant government authorities in the U.S. and the PRC. 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, He Meida, Huirui, Yalan, Yiduo and Taixin is the Chinese RMB. For the subsidiaries whose functional currency is the RMB, all assets and liabilities are translated at the exchange rate on the balance sheet date; equity is translated at historical rates and items in the statement of income are translated at the average rate for the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss) in the statement of equity and amounted to ($3.58 million) and $2.59 million as of December 31, 2018 and 2017, respectively. Assets and liabilities at December 31, 2018 and 2017 were translated at RMB6.88 and RMB6.51 to $1.00 respectively. The average translation rates applied to income statement accounts and consolidated statements of cash flows for the years ended December 31, 2018 and 2017 were RMB6.61 and RMB6.76 to $1.00, respectively. As a result, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation gains or 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 and amounted a loss of $1.20 million and a gain of $1.88 million for the years ended December 31, 2018 and 2017, respectively. Earnings Per Share The Company reports earnings per share in accordance with ASC 260 "Earnings Per Share" Included in the calculation of basic EPS are shares of restricted common stock that have been issued by the Company, all of which are fully vested. Shares of restricted common stock whose issuance is contingent upon the attainment of specified earnings targets are considered outstanding and included in the computation of basic EPS as of the date that all necessary conditions have been satisfied, which is the date upon which the specified amount of earnings has been attained. These shares are to be considered outstanding and included in the computation of diluted EPS as of the beginning of the period in which the conditions are satisfied. If the specified amount of earnings has not been attained as of the end of the reporting period, the contingently issuable shares are excluded from the calculation of basic and diluted EPS. Unvested restricted shares to be issued (share-based compensation) under the 2014 Equity Incentive Plan are not included in basic weighted average number of shares but are considered to be outstanding as of the grant date for purposes of computing diluted earnings per share even though the shares are subject to vesting requirements. Segments The Company applies ASC 280 "Segment Reporting" (1) Wholesale apparel manufacture and sales (2) Retail sales of own-brand clothing Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases January 1, 2019, In June 2016, the FASB issued ASU No. 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" In October 2018, the FASB issued ASU No. 2018-17 "Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities" The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company's consolidated financial statements. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3 INVENTORIES Inventories at December 31, 2018 and 2017 consisted of the following: December 31, December 31, (In thousands of Raw materials $ 6,805 $ 2,148 Work-in-progress 3,308 8,852 Finished goods 55,816 45,182 Total inventories $ 65,929 $ 56,182 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 4 INTANGIBLE ASSETS Land use rights In 2006, the Company obtained a fifty-year land use right on 112,442 square meters of land in the Nanjing Jiangning Economic and Technological Development Zone. In 2014, the Company obtained a fifty-year land use right on 23,333 square meters of land in the Suzhou Kunshan Jinxi Tower Jinxing Road. In 2015, the Company obtained a fifty-year land use right on 33,427 square meters of land in the Tianjin Wuqing Development Zone. Land use rights at December 31, 2018 and 2017 consisted of the following: 2018 2017 (In thousands of Land use rights $ 5,702 $ 5,475 Less: accumulated amortization (740 ) (566 ) Land use rights, net $ 4,962 $ 4,909 Amortization expense was $0.12 million and $0.12 million for the years ended December 31, 2018 and 2017, respectively. Future expected amortization expense for land use rights is approximately $0.12 million for each of the next five years. Impairment of Intangible Assets The Company acquired and gained effective control of Shanghai Yiduo since March 27, 2015. The value of the designer team and other marketing related intangibles was recorded $0.85 million as intangible assets in the consolidated balance sheet as of March 31, 2015. As of December 31, 2018, the Company tested marketing related intangible assets for impairment and determined that fair value was lower than the carrying amount of the marketing related intangible assets. Therefore it was concluded that the carrying amount of marketing related intangible assets of $1.08 million was impaired. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 PROPERTY AND EQUIPMENT The following is a summary of property and equipment at December 31, 2018 and 2017: 2018 2017 (In thousands of Property and plant $ 27,829 $ 28,922 Leasehold improvements 21,278 16,651 Equipment and machinery 2,451 2,877 Office equipment and furniture 3,102 3,739 Motor vehicles 1,112 1,147 55,772 53,336 Less: accumulated depreciation (27,327 ) (27,535 ) Construction-in-progress - 90 Property and equipment, net $ 28,445 $ 25,891 Depreciation expense was $6.54 million and $6.89 million for the years ended December 31, 2018 and 2017, respectively. |
Other Payables and Accrued Liab
Other Payables and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
OTHER PAYABLES AND ACCRUED LIABILITIES | NOTE 6 OTHER PAYABLES AND ACCRUED LIABILITIES Other payables and accrued liabilities at December 31, 2018 and 2017 consisted of the following: 2018 2017 (In thousands of Advance from customers $ 976 $ 1,036 Accrued wages and welfare 8,671 6,146 Other payables 12,311 9,272 Total other payables and accrued liabilities $ 21,958 $ 16,454 As of December 31, 2018, the fair value of foreign currency swap contract principle are included in other receivable ($4.0 million plus unrealized gain) and other payables (equivalent RMB payables). |
Bank Loans
Bank Loans | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
BANK LOANS | NOTE 7 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 December 31, 2018, and 2017. December 31, December 31, Bank (In thousands of Industrial and Commercial Bank of China $ 14,540 $ 21,504 Nanjing Bank 5,089 9,216 China Minsheng Bank 2,908 3,072 Bank of Communications 2,893 1,536 Shanghai Pudong Development Bank 2,613 - China Everbright Bank Shanghai Pudong Development Bank 1,454 - HSBC - 2,402 $ 29,497 $ 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 $8.7 million (RMB60.0 million). These loans are collateralized by the Company’s property and equipment. As of December 31, 2018, Goldenway had borrowed $2.9 million (RMB20.0 million) from Industrial and Commercial Bank of China with an annual interest rate 3.92% and due on November 2019. As of December 31, 2018, approximately $5.8 million was unused and available under this line of credit. In November 2018, Ever-Glory Apparel entered into a line of credit agreement for approximately $14.6 million (RMB100.0 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 December 31, 2018, Ever-Glory Apparel had borrowed $11.6 million (RMB 80.0 million) under this line of credit with annual interest rates ranging from 4.57% to 4.7% and due on July 2019. As of December 31, 2018, approximately $3.0 million was unused and available under this line of credit. In August 2018, Goldenway entered into a line of credit agreement with Nanjing Bank, which allows the Company to borrow up to approximately $7.3 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 December 31, 2018, approximately $7.3 million was unused and available under this line of credit. In August 2018, Ever-Glory Apparel entered into a line of credit agreement for approximately $8.7 million (RMB60.0 million) with Nanjing Bank and guaranteed by Jiangsu Ever-Glory, Mr. Kang and Goldenway. As of December 31, 2018, Ever-Glory Apparel had borrowed $2.9 million (RMB20.0 million) from Nanjing Bank with an annual interest rates 4.41% and due on various dates from January to March 2019. As of December 31, 2018, approximately $5.8 million was unused and available under this line of credit. In May 2018, LA GO GO entered into a revolving line of credit agreement with Nanjing Bank, which allows the Company to borrow up to approximately $2.9 million (RMB20.0 million). The line of credit is guaranteed by Mr. Kang and Goldenway. As of December 31, 2018, LA GO GO had borrowed $2.2 million (RMB15.0 million) under this line of credit with an annual interest rate of 5.22% and due in June 2019. As of December 31, 2018, approximately $0.7 million was unused and available under this line of credit. In June 2018, LA GO GO entered into a line of credit agreement for approximately $2.9 million (RMB20.0 million) with China Minsheng Bank and guaranteed by Ever-Glory Apparel and Mr. Kang. As of December 31, 2018, LA GO GO had borrowed $2.9 million (RMB20.0 million) from China Minsheng Bank with an annual interest rate of 4.79% and due in June 2019. In November 2018, LA GO GO entered into a line of credit agreement for approximately $2.9 million (RMB20.0 million) with the Bank of Communications and guaranteed by Jiangsu Ever-Glory, Ever-Glory Apparel and Jiangsu LAGOGO. As of December 31, 2018, LA GO GO had borrowed $2.9 million (RMB20.0 million) from the Bank of Communications with an annual interest rate 4.57% and due on variable dates from January to November 2019. In July 2018, Ever-Glory Apparel entered into a line of credit agreement for approximately $2.9 million (RMB20.0 million) with the Shanghai Pudong Development Bank and guaranteed by Goldenway. As of December 31, 2018, Ever-Glory Apparel had borrowed $2.6 million (RMB18.0 million) from the Bank of Communications with an annual interest rate 4.57% and due on date November 2019. As of September 30, 2018, approximately $0.3 million was unused and available under this line of credit. In July 2017, Ever-Glory Apparel entered into a line of credit agreement for approximately $5.8 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 December 31, 2018, Ever-Glory Apparel had borrowed $1.5 million (RMB10.0 million) from the Bank of Communications with an annual interest rate 4.57% and due on date April 2019. As of December 31, 2018, approximately $4.3 million was unused and available under this line of credit. All bank loans are used to fund our daily operations. All loans have been repaid before or at maturity date. Total interest expense on bank loans amounted to $1.99 million and $1.65 million for the year ended December 31, 2018 and 2017, respectively. The annual average interest rate of bank loans was 4.59% and 4.92% for the year ended December 31, 2018 and 2017, respectively. |
Derivative Liability
Derivative Liability | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITY | NOTE 8 DERIVATIVE LIABILITY Foreign currency swap contracts During 2018, the Company had entered into four foreign currency swap contracts with three banks. Due to the increased demand of effective control on financial management for daily operations, Ever-Glory Apparel had entered into different foreign currency swap contracts to exchange $6.0 million for equivalent RMB with Bank of China in May, entered into a foreign currency swap contract to exchange $3.0 million for equivalent RMB with Industrial and Commercial Bank of China in June and entered into a foreign currency swap contract to exchange $6.0 million and $4.0 million for equivalent RMB with Shanghai Pudong Development Bank in July. The terms of three foreign currency contracts are both six months and the contract of $4.0 million with Shanghai Pudong Development Bank is three months. Ever-Glory Apparel and the banks swapped two currencies by same pre-determined exchange rate at the beginning and end of the contracts. During the period, the Company pays annual interest of 1.43% for the RMB received and receives no interest for the USD exchanged with the Bank of China and Industrial and Commercial Bank of China. The company pays annual interest of 0.98% for the RMB received and receives 0.0001% interest for the USD exchanged with Shanghai Pudong Development Bank. If the Company failed to execute the exchange at the expiration of contracts, the banks would sell the USD at the market rate then the difference in RMB will be converted into bank loan for the Company. As of December 31, 2018, the fair value of principal amounts are included in other receivable ($4.0 million plus unrealized gain) and other payables (equivalent RMB payables) in the consolidated balance sheets, and unrealized gain of $0.2 million for the year ended December 31, 2018 is recognized in the income from operations. This contract was settled in January 2019. Forward foreign exchange contracts 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 December 31, 2018, the Company did not have any outstanding derivative contracts. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 9 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 years ended December 31, 2018 and 2017 was taxable in the following jurisdictions: 2018 2017 (In thousands of PRC $ 16,384 $ 17,881 BVI 18 (1 ) Others (20 ) (10 ) $ 16,382 $ 17,870 The following table reconciles the PRC statutory rates to the Company’s effective tax rate for the years ended December 31, 2018 and 2017, respectively: 2018 2017 (In thousands of PRC statutory rate 25.0 % 25.0 % Net operating losses for which no deferred tax assets was recognized 6.6 6.4 Other (1.4 ) 1.1 Effective income tax rate 30.2 % 32.5 % Income tax expense for the years ended December 31, 2018 and 2017 is as follows: 2018 2017 (In thousands of Current $ 7,115 $ 7,177 Deferred (2,173 ) (1,372 ) Income tax expense $ 4,942 $ 5,805 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 $105.9 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, 2018. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 10 EARNINGS PER SHARE Basic and diluted earnings per share for 2018 and 2017 were calculated as follows: 2018 2017 Weighted average number of common shares- Basic and diluted 14,796,947 14,795,992 Earnings per share - basic and diluted $ 0.81 $ 0.84 As of December 31, 2018 and 2017, there was no securities that could potentially dilute basic EPS and would be included in the calculation of diluted EPS. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 11 STOCKHOLDERS’ EQUITY Stock Issued to Independent Directors 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. On July 26, 2018, the Company issued 2,206 shares of Company’s common stock to two of the Company’s independent directors as compensation for their services rendered during the fourth quarter of 2017, and the first and second quarters of 2018 as directors. The shares issued in 2018 were valued at $3.39 per share, which was the average market price of the common stock for the five days before the grant date. Statutory Reserve Subsidiaries incorporated in China are required to make appropriations to reserve funds, comprising the statutory surplus reserve, statutory public welfare fund and discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the People’s Republic of China (“PRC GAAP”). Appropriations to the statutory surplus reserve are to be at least 10% of the after tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entities’ registered capital. Appropriations to the statutory public welfare fund are 10% of the after tax net income determined in accordance with PRC GAAP. The statutory public welfare fund is established for the purpose of providing employee facilities and other collective benefits to the employees and is non-distributable other than in liquidation. Appropriations to the surplus reserve are made at the discretion of the Board of Directors. Effective January 1, 2006, the Company is only required to contribute to one statutory reserve fund at 10% of net income after tax per annum, and any contributions are not to exceed 50% of the respective companies’ registered capital. As of December 31, 2018, New-Tailun, Tianjin La GO GO and Catch-Luck had fulfilled the 50% statutory reserve contribution requirement; therefore no further transfers are required for those entities. In 2018, Goldenway appropriated $0.33 million, Ever-Glory Apparel appropriated $0.59 million, Shanghai La GO GO appropriated $0.08 million and Jiangsu La GO GO appropriated $0.29 million to the statutory reserve. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 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 Jiangsu Wubijia 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 some Company's retail stores since the third quarter of 2014. During the years ended December 31, 2018 and 2017, the Company received $96,556 and $54,081 from the customers and paid $79,925 and $42,241 to Wubijia through the consignment, respectively. The net profit of $16,631 and $11,840 was recorded as other income during the years ended December 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 years ended December 31, 2018 and 2017, the Company received $4,452 and $6,443 from the customers and paid $0 and $11,661 to Nanjing Knitting through the consignment, respectively. The net profit (loss) of $0 and ($5,218) was recorded as other income during the years ended December 31, 2018 and 2017. Included in other income for the years ended December 31, 2018 and 2017 is rental income from EsC'Lav, the entity controlled by Mr. Kang under operating lease agreement with term though 2018. The rental income is $0 and $14,638 for the years ended December 31, 2018 and 2017, respectively. Other expenses due to Related Parties Included in other expenses for the years ended December 31, 2018 and 2017 are rental expenses due to entities controlled by Mr. Kang under operating lease agreements as follows (See details at Note 13): 2018 2017 (In thousands of Jiangsu Ever-Glory $ - $ 47 Chuzhou Huarui 217 222 EsC'Lav 25 - Kunshan Enjin 94 44 Total $ 336 $ 313 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 of $1.44 million and $1.39 million during the years ended 2018 and 2017, respectively, from Nanjing Knitting. In addition, the Company sub-contracted certain manufacturing work to related companies totaling $25.0 million and $23.79 million for the years ended December 31, 2018 and 2017, respectively. The Company provided raw materials to the sub-contractors and was charged a fixed fee for labor provided by the sub-contractors. Sub-contracts with related parties included in cost of sales for the years ended December 31, 2018 and 2017 are as follows: 2018 2017 (In thousands of Ever-Glory Vietnam $ 14,718 $ 15,998 Chuzhou Huarui 6,356 4,155 Ever-Glory Cambodia - 179 Fengyang Huarui 2,438 1,860 Nanjing Ever-Kyowa 1,566 1,577 EsC'Lav 50 20 Total $ 25,128 $ 23,789 Accounts Payable – Related Parties The accounts payable to related parties at December 31, 2018 and 2017 are as follows: 2018 2017 (In thousands of Ever-Glory Vietnam $ 1,863 1,934 Fengyang Huarui 622 459 Nanjing Ever-Kyowa 580 900 Chuzhou Huarui 888 1,152 Nanjing Knitting 171 114 Esc'elav - 6 Jiangsu Ever-Glory 632 110 Total $ 4,756 $ 4,675 Amounts Due From Related Parties – Current Assets The amounts due from related parties at December 31, 2018 and 2017 are as follows: 2018 2017 (In thousands of Jiangsu Ever-Glory $ 122 $ 265 EsC'eLav 70 - Total $ 192 $ 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 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 $1.4 million and $0.3 million during 2018 and 2017, respectively. Jiangsu Ever-Glory purchased raw materials on the Company's behalf and sold to the Company at cost for $1.1 million and $49,967 during 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 the expiration or termination of the underlying lines of credit and is to pay an annual interest at the rate of 6.0% of the amounts provided. As of December 31, 2018 and 2017, Jiangsu Ever-Glory had provided guarantees for approximately $33.4 million (RMB 230.0 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. As of December 31, 2018 and 2017, the value of the collateral, as per appraisals obtained by the banks in connection with these lines of credit is approximately $29.9 million (RMB 205.5 million) and $31.6 million (RMB 205.5 million), respectively. Mr. Kang has also provided a personal guarantee for $14.5 million (RMB 100.0 million) and $21.5 million (RMB 140.0 million) at the years ended of December 31, 2018 and 2017, respectively. As of December 31, 2017, $12.8 million (RMB 83.6 million) was outstanding due from Jiangsu Ever-Glory under the counter guarantee agreement. During the year ended December 31, 2018, an additional $8.4 million (RMB 55.7 million) was provided to and repayment of $10.8 million (RMB 71.1 million) was received from Jiangsu Ever-Glory under the counter-guarantee agreement. As of December 31, 2018, the amount of the counter-guarantee had decreased to $9.9 million (RMB 68.2 million) (the difference represents currency exchange adjustment of ($0.5) million), which was 29.7% of the aggregate amount of lines of credit. This amount plus accrued interest of $0.5 million (2018) and $2.6 million (2017) have been classified as a reduction of equity, consistent with the guidance of SEC Staff Accounting Bulletins 4E and 4G. As of December 31, 2018 and 2017, the amount classified as a reduction of equity was $10.4 million and $15.4 million, respectively. Interest of 0.5% is charged on net amounts due from Jiangsu Ever-Glory at each month end. From April 1, 2015, interest rate has changed to 0.41% as the bank benchmark interest rate decreased. Interest income for the years ended December 31, 2018 and 2017 was approximately $0.7 million and $0.8 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 COMMITMENTS AND CONTINGENCIES Economic and Political Risks The majority of the Company's operations are conducted in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. The Company's operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. Operating Lease Commitment The Company has entered into the operating lease agreement with Chuzhou Huarui as LA GO GO's logistics warehouse in 2018. The leased warehouse is located in Chuzhou City in Anhui Province. The lease term is one year and expires on December 31, 2018, at an annual rental of $0.2 million (RMB 1.5 million). For the years ended December 31, 2018 and 2017, the Company recognized rental expense in the amounts of approximately $216,890 and $222,000, respectively. The Company has entered the operating lease agreement with Kunshan Enjin as LA GO GO's Logistics warehouse since inception of the Company. The leased warehouse is located in Suzhou Kunshan. The lease term is one year and can be renewed once a year. On January 1, 2018, the Company renewed the lease which expires on December 31, 2018, at an annual rental of $43,000 (RMB 0.3 million). For the years ended December 31, 2018 and 2017, the Company recognized rental expense in the amounts of approximately $93,948 and $44,231, respectively. The Company has entered the operating lease agreement with Shahe Village for approximately 10 Mu of land in Shahe Village, Shanghai. The term of the lease is 40 years starting from January 1, 2013, with an annual rent of $0.4 million (RMB 2.6 million) for the first 5 years. The rent will increase by $15,000 (RMB 0.1 million) every five years. For the years ended December 31, 2018 and 2017 total rental expense was $0.4 million and $0.4 million, respectively. The Company leases retail space, warehouses and office facilities under operating leases expiring on various dates through 2018. The majority of the Company's retail leases is for twelve-month periods and provide for contingent rents, which are determined as a percentage of gross sales in excess of specified levels. The Company records a lease liability in the consolidated balance sheets and the corresponding rental expense when management determines that achieving the specified levels during the fiscal year is probable. Total rental expense was $48.03 million and $51.04 million for the years ended December 31, 2018 and 2017, respectively. Future minimum lease payments for leases with initial or remaining noncancelable lease terms in excess of one year are as follows: Year ending December 31, (In thousands of U.S. Dollars) 2019 409 2020 409 2021 409 2022 409 2023 423 Thereafter 13,487 $ 15,546 Under the new Leases guidance, the Company will record right-of-use assets and lease liabilities in the consolidated balance sheets. In 2019, the right-of-use assets and lease liabilities will approximately be $56.5 million (RMB 373.3 million) and the annual amortization expenses will be booked in consolidated statement of operations and allocating between cost of sales and operating expenses. Legal Proceedings There is no material pending legal proceeding to which the Company is a party. |
Concentrations and Risks
Concentrations and Risks | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS AND RISKS | NOTE 14 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, management has concluded $5.9 million and $5.5 million of doubtful accounts on December 31, 2018 and 2017. 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. The Company had one customer represented approximately 20.9% of the total revenues for the year ended December 31, 2018 and had one customer represented approximately 13.5% of the total revenues for the year ended December 31, 2017. For the Company’s wholesale business during 2018 and 2017, no supplier represented more than 10% of the total raw materials purchased. For the Company’s retail business, the Company had four suppliers represented approximately 24.0%, 18.2%, 15.1% and 13.9% of the total raw materials purchased, respectively during 2018. For the Company’s retail business, the Company had six suppliers represented approximately 11.7%, 12.0%, 13.3%, 13.9%, 15.7% and 17.1% of the total raw materials purchased, respectively during 2017. For the wholesale business, the Company relied on one manufacturer for 18.1% and 24.0% of total purchased finished goods during 2018 and 2017, respectively. For the retail business, the Company did not rely on any single manufacturer for more than 10% of total purchased finished goods during 2018 and 2017. The Company’s revenues for the years ended December 31, 2018 and 2017 were earned in the following geographic areas: 2018 2017 (In thousands of Mainland China $ 89,269 $ 65,811 Hong Kong China 38,106 39,738 Germany 6,748 8,901 United Kingdom 15,460 12,417 Europe-Other 30,747 34,804 Japan 7,583 3,515 United States 30,696 25,050 Total wholesale business 218,609 190,236 Retail business 229,899 225,345 Total $ 448,508 $ 415,581 Substantially all of the Company’s long-lived assets are located in the PRC as of December 31, 2018 and 2017. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
SEGMENTS | NOTE 15 SEGMENTS The Company reports financial and operating information in the following two segments: (a) Wholesale segment (b) Retail segment Wholesale segment Retail segment Total (In thousands of U.S. Dollars) December 31, 2018 Segment profit or loss: Net revenue from external customers $ 218,609 $ 229,899 $ 448,508 Income from operations $ 12,071 $ 2,948 $ 15,019 Interest income $ 1,330 $ 45 $ 1,375 Interest expense $ 1,667 $ 322 $ 1,989 Depreciation and amortization $ 1,175 $ 5,489 $ 6,664 Income tax expense $ 3,337 $ 1,605 $ 4,942 Segment assets: Additions to property, plant and equipment $ 2,153 $ 10,029 $ 12,182 Total assets $ 98,493 $ 153,778 $ 252,271 December 31, 2017 Segment profit or loss: Net revenue from external customers $ 190,236 $ 225,345 $ 415,581 Income from operations $ 10,331 $ 4,418 $ 14,749 Interest income $ 1,188 $ 72 $ 1,260 Interest expense $ 1,275 $ 373 $ 1,648 Depreciation and amortization $ 1,104 $ 5,911 $ 7,015 Income tax expense $ 3,048 $ 2,757 $ 5,805 Segment assets: Additions to property, plant and equipment $ 759 $ 7,805 $ 8,564 Total assets $ 97,026 $ 147,966 $ 244,992 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include Ever-Glory International Group, Inc. and its subsidiaries, and are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions In preparing the consolidated financial statements in conformity with GAAP, management makes certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the periods reported. Management believes that the estimates utilized in preparing the financial statements are reasonable and prudent based on the best information available at the time the estimates are made. Actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand and demand deposits with banks with original maturities within three months. |
Accounts Receivable, net | Accounts Receivable, net 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. As of December 31, 2018 and 2017, $0.66 million and $1.2 million of bad debt expense have been made in the consolidated financial statements respectively. The allowance for doubtful account balances as of December 31, 2018 and 2017 are $5.9 million and $5.5 million, respectively. |
Inventories | Inventories Wholesale inventories are stated at lower of cost or net realizable value, cost being determined on a specific identification method. The Company manufactures products upon receipt of orders from its customers. All products must pass the customers’ quality assurance procedures before delivery. Therefore, products are rarely returned by customers after delivery. Retail inventories are stated at the lower of average cost or net realizable value, cost being determined on a specific identification method. The Company records a provision for slow-moving or obsolete materials and finished goods aged more than two years. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Expenditures for additions, major renewals and betterments are capitalized and expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided on a straight-line basis, less estimated residual value, over the assets’ estimated useful lives. The estimated useful lives are as follows: Property and plant 15-20 Years Leasehold improvements 10 Months - 2 Years Machinery and equipment 5-10 Years Office equipment and furniture 3-5 Years Motor vehicles 5 Years |
Land Use Rights | Land Use Rights All land in the PRC is owned by the government and cannot be sold to any individual or company. However, the government may grant a “land use right” to occupy, develop and use land. The Company records land use rights obtained as intangible assets at cost, which is amortized evenly over the grant period of 50 years. |
Long-Lived Assets | Long-Lived Assets Long-lived assets, property, equipment and land use rights held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, when undiscounted future cash flows will not be sufficient to recover an asset’s carrying amount, the asset is written down to its fair value. There were no impairments of long-lived assets as of December 31, 2018 and 2017. |
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). The fair value of forward exchange contracts is based on broker quotes, if available. If broker quotes are not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price at the reporting date for the residual maturity of the contract using a risk-free interest rate based on government bonds. At December 31, 2018 and 2017, the Company’s financial assets (all Level 1) consist of cash placed with financial institutions that management considers to be of a high quality. 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. As of December 31, 2018, the Company has the following derivative financial instruments measured at their fair value using Level 2 quoted prices provided by banks. The fair value of foreign currency swap contracts is determined by the variation of measurement date foreign exchange market rates and contract closing date predetermined foreign exchange rates. As of December 31, 2017, the Company has five derivative liability subjects to recurring fair value measurement (Level 3) with the change in fair value recognized in earnings. The Company has adopted ASC 825-10 “ Financial Instruments |
Derivative Financial Instruments | Derivative Financial Instruments From time to time, the Company uses derivative financial instruments to manage its exposure to foreign currency risks arising from operational activities or on certain existing assets and liabilities. The Company does not hold or issue derivative instruments for trading purposes. The Company may enter into forward foreign exchange contracts, foreign exchange options, or foreign exchange currency swap contracts to manage exposure to certain foreign currency operating transactions. These instruments may offset a portion of the foreign currency re-measurement gains or losses, or changes in fair value. The Company may also enter into above similar derivative instruments to hedge the exposure to variability in the expected cash flows of forecasted transactions such as international sales or purchases that the Company expects to receive or commit to remit foreign currencies. In these cases, the Company designates these instruments as the cash flow hedges. Derivative financial instruments are recognized initially at fair value and transaction costs are expensed immediately. Subsequent to initial recognition, derivative financial instruments are stated at fair value. The gain or loss on re-measurement to fair value is recognized immediately in earnings when such instruments are designated as fair value hedges or ineffective portion of cash flow hedges. The accumulated gain or loss from effective portions of cash flow hedges are recorded in accumulated other comprehensive income/(loss) (“AOCI”) until the hedged item is recognized in earnings. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. |
Revenue and Cost Recognition | Revenue and Cost Recognition The Company recognizes wholesale revenue from product sales, net of value-added taxes, upon delivery for local sales and upon shipment of the products for export sales, at such time title passes to the customer. Retail sales are recorded net of promotional discounts, rebates, and return allowances. Retail store sales are recognized at the time of the register receipt. Retail online sales are recognized when products are shipped and customers receive the products because the Company retains a portion of the risk of loss on these sales during transit. The Company’s revenue recognition policy is in compliance with ASC 606, Revenue from Contracts with Customers (i) identification of the promised goods and services in the contract; (ii) determination of whether the promised goods and services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery for local sales and upon shipment of the products for export sale. For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules. Cost of goods sold includes the direct raw material cost, direct labor cost, manufacturing overheads including depreciation of production equipment, and rent and commission due to department stores consistent with the revenue earned. Cost of goods sold excludes warehousing costs, which historically have not been significant. Local transportation charges and production inspection charges are included in selling expenses and totaled $1.1 million and $0.8 million in the years ended December 31, 2018 and 2017, respectively. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. Research and development costs included in general and administrative expenses for the years ended December 31, 2018 and 2017 amounted to $0.8 million and $1.07 million, respectively. |
Government subsidies | Government subsidies Government subsidies are recognized when received and when all the conditions for their receipt have been met. Subsidies that compensate the Company for expenses incurred are recognized as a reduction of expenses in the consolidated statements of operations. Subsidies that are not associated with expenses are recognized as other income. Four of the Company’s PRC subsidiaries received government subsidies of $1.19 million and $2.93 million for the years ended December 31, 2018 and 2017, respectively, which was recorded in other income when subsidies were received and all the conditions were met. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. The Company has adopted ASC 740 “ Income Taxes The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company does not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the years ended December 31, 2018 and 2017. The Company’s effective tax rate differs from the PRC statutory rate primarily due to non-deductible expenses, temporary differences, and preferential tax treatment. The Company files income tax returns with the relevant government authorities in the U.S. and the PRC. |
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, He Meida, Huirui, Yalan, Yiduo and Taixin is the Chinese RMB. For the subsidiaries whose functional currency is the RMB, all assets and liabilities are translated at the exchange rate on the balance sheet date; equity is translated at historical rates and items in the statement of income are translated at the average rate for the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss) in the statement of equity and amounted to ($3.58 million) and $2.59 million as of December 31, 2018 and 2017, respectively. Assets and liabilities at December 31, 2018 and 2017 were translated at RMB6.88 and RMB6.51 to $1.00 respectively. The average translation rates applied to income statement accounts and consolidated statements of cash flows for the years ended December 31, 2018 and 2017 were RMB6.61 and RMB6.76 to $1.00, respectively. As a result, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation gains or 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 and amounted a loss of $1.20 million and a gain of $1.88 million for the years ended December 31, 2018 and 2017, respectively. |
Earnings Per Share | Earnings Per Share The Company reports earnings per share in accordance with ASC 260 “Earnings Per Share” Included in the calculation of basic EPS are shares of restricted common stock that have been issued by the Company, all of which are fully vested. Shares of restricted common stock whose issuance is contingent upon the attainment of specified earnings targets are considered outstanding and included in the computation of basic EPS as of the date that all necessary conditions have been satisfied, which is the date upon which the specified amount of earnings has been attained. These shares are to be considered outstanding and included in the computation of diluted EPS as of the beginning of the period in which the conditions are satisfied. If the specified amount of earnings has not been attained as of the end of the reporting period, the contingently issuable shares are excluded from the calculation of basic and diluted EPS. Unvested restricted shares to be issued (share-based compensation) under the Equity Incentive Plan are not included in basic weighted average number of shares but are considered to be outstanding as of the grant date for purposes of computing diluted earnings per share even though the shares are subject to vesting requirements. |
Segments | Segments The Company applies ASC 280 “Segment Reporting” (1) Wholesale apparel manufacture and sales (2) Retail sales of own-brand clothing |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases January 1, 2019, In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” In October 2018, the FASB issued ASU No. 2018-17 “Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities” providers are variable interests. The Company is currently assessing the impact of this ASU on its consolidated financial statements. The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of estimated useful life of property and equipment | Property and plant 15-20 Years Leasehold improvements 10 Months - 2 Years Machinery and equipment 5-10 Years Office equipment and furniture 3-5 Years Motor vehicles 5 Years |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | December 31, December 31, (In thousands of Raw materials $ 6,805 $ 2,148 Work-in-progress 3,308 8,852 Finished goods 55,816 45,182 Total inventories $ 65,929 $ 56,182 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of land use rights | 2018 2017 (In thousands of Land use rights $ 5,702 $ 5,475 Less: accumulated amortization (740 ) (566 ) Land use rights, net $ 4,962 $ 4,909 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of property and equipment | 2018 2017 (In thousands of Property and plant $ 27,829 $ 28,922 Leasehold improvements 21,278 16,651 Equipment and machinery 2,451 2,877 Office equipment and furniture 3,102 3,739 Motor vehicles 1,112 1,147 55,772 53,336 Less: accumulated depreciation (27,327 ) (27,535 ) Construction-in-progress - 90 Property and equipment, net $ 28,445 $ 25,891 |
Other Payables and Accrued Li_2
Other Payables and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Summary of other payables and accrued liabilities | 2018 2017 (In thousands of Advance from customers $ 976 $ 1,036 Accrued wages and welfare 8,671 6,146 Other payables 12,311 9,272 Total other payables and accrued liabilities $ 21,958 $ 16,454 |
Bank Loans (Tables)
Bank Loans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of short-term bank loans | December 31, December 31, Bank (In thousands of Industrial and Commercial Bank of China $ 14,540 $ 21,504 Nanjing Bank 5,089 9,216 China Minsheng Bank 2,908 3,072 Bank of Communications 2,893 1,536 Shanghai Pudong Development Bank 2,613 - China Everbright Bank Shanghai Pudong Development Bank 1,454 - HSBC - 2,402 $ 29,497 $ 37,730 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of pre-tax income in jurisdictions | 2018 2017 (In thousands of PRC $ 16,384 $ 17,881 BVI 18 (1 ) Others (20 ) (10 ) $ 16,382 $ 17,870 |
Summary of reconciliation of PRC statutory rates to the Company's effective tax rate | 2018 2017 (In thousands of PRC statutory rate 25.0 % 25.0 % Net operating losses for which no deferred tax assets was recognized 6.6 6.4 Other (1.4 ) 1.1 Effective income tax rate 30.2 % 32.5 % |
Schedule of income tax expense | 2018 2017 (In thousands of Current $ 7,115 $ 7,177 Deferred (2,173 ) (1,372 ) Income tax expense $ 4,942 $ 5,805 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | 2018 2017 Weighted average number of common shares- Basic and diluted 14,796,947 14,795,992 Earnings per share - basic and diluted $ 0.81 $ 0.84 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Summary of other expenses due to related parties | 2018 2017 (In thousands of Jiangsu Ever-Glory $ - $ 47 Chuzhou Huarui 217 222 EsC’Lav 25 - Kunshan Enjin 94 44 Total $ 336 $ 313 |
Summary of sub-contracts with related parties | 2018 2017 (In thousands of Ever-Glory Vietnam $ 14,718 $ 15,998 Chuzhou Huarui 6,356 4,155 Ever-Glory Cambodia - 179 Fengyang Huarui 2,438 1,860 Nanjing Ever-Kyowa 1,566 1,577 EsC’Lav 50 20 Total $ 25,128 $ 23,789 |
Summary of accounts payable to related parties | 2018 2017 (In thousands of Ever-Glory Vietnam $ 1,863 1,934 Fengyang Huarui 622 459 Nanjing Ever-Kyowa 580 900 Chuzhou Huarui 888 1,152 Nanjing Knitting 171 114 Esc’elav - 6 Jiangsu Ever-Glory 632 110 Total $ 4,756 $ 4,675 |
Summary of amounts due from related party current assets | 2018 2017 (In thousands of Jiangsu Ever-Glory $ 122 $ 265 EsC’eLav 70 - Total $ 192 $ 265 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of future minimum lease payments | Year ending December 31, (In thousands of U.S. Dollars) 2019 409 2020 409 2021 409 2022 409 2023 423 Thereafter 13,487 $ 15,546 |
Concentrations and Risks (Table
Concentrations and Risks (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Schedule of Company's revenues as per geographic areas | 2018 2017 (In thousands of Mainland China $ 89,269 $ 65,811 Hong Kong China 38,106 39,738 Germany 6,748 8,901 United Kingdom 15,460 12,417 Europe-Other 30,747 34,804 Japan 7,583 3,515 United States 30,696 25,050 Total wholesale business 218,609 190,236 Retail business 229,899 225,345 Total $ 448,508 $ 415,581 |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
Summary of financial and operating information | Wholesale segment Retail segment Total (In thousands of U.S. Dollars) December 31, 2018 Segment profit or loss: Net revenue from external customers $ 218,609 $ 229,899 $ 448,508 Income from operations $ 12,071 $ 2,948 $ 15,019 Interest income $ 1,330 $ 45 $ 1,375 Interest expense $ 1,667 $ 322 $ 1,989 Depreciation and amortization $ 1,175 $ 5,489 $ 6,664 Income tax expense $ 3,337 $ 1,605 $ 4,942 Segment assets: Additions to property, plant and equipment $ 2,153 $ 10,029 $ 12,182 Total assets $ 98,493 $ 153,778 $ 252,271 December 31, 2017 Segment profit or loss: Net revenue from external customers $ 190,236 $ 225,345 $ 415,581 Income from operations $ 10,331 $ 4,418 $ 14,749 Interest income $ 1,188 $ 72 $ 1,260 Interest expense $ 1,275 $ 373 $ 1,648 Depreciation and amortization $ 1,104 $ 5,911 $ 7,015 Income tax expense $ 3,048 $ 2,757 $ 5,805 Segment assets: Additions to property, plant and equipment $ 759 $ 7,805 $ 8,564 Total assets $ 97,026 $ 147,966 $ 244,992 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) | Dec. 31, 2018 | Mar. 31, 2015 |
Subsidiaries [Member] | ||
Organization and Basis of Presentation (Textual) | ||
percentage of retail operations ownership | 78.00% | |
La Go Go [Member] | ||
Organization and Basis of Presentation (Textual) | ||
Business acquisition, percentage of voting interests acquired | 78.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Motor vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 5 years |
Property and plant [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 20 years |
Property and plant [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 15 years |
Leasehold improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 2 years |
Leasehold improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 10 months |
Machinery and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 10 years |
Machinery and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 5 years |
Office equipment and furniture [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 5 years |
Office equipment and furniture [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 3 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | |
Summary of Significant Accounting Policies (Textual) | ||
Bad debt expense | $ 660 | $ 1,223 |
Land use right, useful life | 50 years | |
Description of provision recorded on inventory | The Company records a provision for slow-moving or obsolete materials and finished goods aged more than two years. | |
Impairment charges of long lived assets | ||
Inspection charges and selling expenses | 1,100 | 800 |
Research and development costs | 800 | 1,070 |
PRC received government subsidies | 1,190 | 2,930 |
Accumulated other comprehensive income | $ (3,578) | 2,585 |
Assets and liabilities translation rate, description | Assets and liabilities at December 31, 2018 and 2017 were translated at RMB6.88 and RMB6.51 to $1.00 respectively. | |
Average translation rate applied to income statement accounts and statement of cash flows, description | The average translation rates applied to income statement accounts and statement of cash flows for the years ended December 31, 2018 and 2017 were RMB6.61 and RMB6.76 to $1.00, respectively. | |
Gains or losses from exchange rate fluctuations | $ 1,200 | 1,880 |
Number of segments | Segment | 2 | |
Accounts Receivable [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Allowance for doubtful accounts | $ 5,900 | $ 5,500 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of inventories | ||
Raw materials | $ 6,805 | $ 2,148 |
Work-in-progress | 3,308 | 8,852 |
Finished goods | 55,816 | 45,182 |
Total inventories | $ 65,929 | $ 56,182 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of land use rights | ||
Land use rights | $ 5,702 | $ 5,475 |
Less: accumulated amortization | (740) | (566) |
Land use rights, net | $ 4,962 | $ 5,995 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015m² | Dec. 31, 2014m² | Dec. 31, 2006m² | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2015USD ($) | |
Intangible Assets (Textual) | ||||||
Land use right, useful life | 50 years | |||||
Amortization expenses | $ 120 | $ 120 | ||||
Expected amortization expense year one | 120 | |||||
Expected amortization expense year two | 120 | |||||
Expected amortization expense year three | 120 | |||||
Expected amortization expense year four | 120 | |||||
Expected amortization expense year five | 120 | |||||
Non-controlling interest increased | 230 | |||||
Impairment marketing related intangible assets | $ 1,086 | |||||
Tianjin Wuqing Development Zone [Member] | ||||||
Intangible Assets (Textual) | ||||||
Area of land square meters | m² | 33,427 | |||||
Land use right, useful life | 50 years | |||||
Suzhou Kunshan Jinxi Tower Jinxing Road [Member] | ||||||
Intangible Assets (Textual) | ||||||
Area of land square meters | m² | 23,333 | |||||
Land use right, useful life | 50 years | |||||
Technological Development Zone [Member] | ||||||
Intangible Assets (Textual) | ||||||
Area of land square meters | m² | 112,442 | |||||
Land use right, useful life | 50 years | |||||
Nanjing Jiangning Economic [Member] | ||||||
Intangible Assets (Textual) | ||||||
Area of land square meters | m² | 112,442 | |||||
Land use right, useful life | 50 years | |||||
Shanghai Yiduo [Member] | ||||||
Intangible Assets (Textual) | ||||||
Intangible assets | $ 850 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 55,772 | $ 53,336 |
Less: accumulated depreciation | (27,327) | (27,535) |
Construction-in-progress | 90 | |
Property and equipment, net | 28,445 | 25,891 |
Office equipment and furniture [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 3,102 | 3,739 |
Equipment and machinery [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 2,451 | 2,877 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 21,278 | 16,651 |
Property and plant [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 27,829 | 28,922 |
Motor vehicles [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 1,112 | $ 1,147 |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property and Equipment (Textual) | ||
Depreciation expense | $ 6,540 | $ 6,890 |
Other Payables and Accrued Li_3
Other Payables and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Advance from customers | $ 976 | $ 1,036 |
Accrued wages and welfare | 8,671 | 6,146 |
Other payables | 12,311 | 9,272 |
Total other payables and accrued liabilities | $ 21,958 | $ 16,454 |
Other Payables and Accrued Li_4
Other Payables and Accrued Liabilities (Details Textual) $ in Thousands | Dec. 31, 2018USD ($) |
Other Payables and Accrued Liabilities (Textual) | |
Unrealized gain on other receivable | $ 4,000 |
Bank Loans (Details)
Bank Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of short term bank loans | ||
Bank loans | $ 29,497 | $ 37,730 |
China Everbright Bank Shanghai Pudong Development Bank [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 1,454 | |
China Minsheng Bank [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 2,908 | 3,072 |
Bank of Communications [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 2,893 | 1,536 |
Industrial and Commercial Bank of China [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 14,540 | 21,504 |
Nanjing Bank [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 5,089 | 9,216 |
HSBC [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 2,402 | |
Shanghai Pudong Development Bank [Member] | ||
Schedule of short term bank loans | ||
Bank loans | $ 2,613 |
Bank Loans (Details Textual)
Bank Loans (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2018 | Dec. 31, 2017 | Nov. 30, 2018 | Sep. 30, 2018 | Aug. 31, 2018 | Jun. 30, 2018 | May 31, 2018 | Jul. 31, 2017 | Dec. 31, 2016 | |
Bank Loans (Textual) | |||||||||
Line of credit annual interest rates | 4.59% | 4.92% | |||||||
Interest expense on bank loans | $ 1,990 | $ 1,650 | |||||||
Industrial and Commercial Bank Of China [Member] | Goldenway [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Borrowed loans from related party | 2,900 | ||||||||
Industrial and Commercial Bank Of China [Member] | Goldenway [Member] | CNY [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Borrowed loans from related party | 20,000 | ||||||||
Industrial and Commercial Bank Of China [Member] | Ever Glory Apparel [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | $ 14,600 | ||||||||
Unused line of credit | $ 3,000 | ||||||||
Line of credit extended maturity date | Jul. 31, 2019 | ||||||||
Borrowed loans from related party | $ 11,600 | ||||||||
Industrial and Commercial Bank Of China [Member] | Ever Glory Apparel [Member] | CNY [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | 100,000 | ||||||||
Borrowed loans from related party | $ 80,000 | ||||||||
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% | ||||||||
Nanjing Bank [Member] | Ever Glory Apparel [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | $ 5,800 | $ 8,700 | |||||||
Unused line of credit | $ 7,300 | ||||||||
Line of credit annual interest rates | 4.41% | ||||||||
Due date of revolving line of credit agreement | January to March 2019. | ||||||||
Borrowed loans from related party | $ 2,900 | ||||||||
Nanjing Bank [Member] | Ever Glory Apparel [Member] | CNY [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | 60,000 | ||||||||
Borrowed loans from related party | 20,000 | ||||||||
La Go Go [Member] | Ever Glory Apparel [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | 2,900 | $ 2,900 | |||||||
Unused line of credit | $ 700 | ||||||||
Line of credit extended maturity date | Jun. 30, 2019 | ||||||||
Line of credit annual interest rates | 5.22% | ||||||||
Borrowed loans from related party | $ 2,200 | ||||||||
La Go Go [Member] | Ever Glory Apparel [Member] | CNY [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | $ 20,000 | $ 20,000 | |||||||
Borrowed loans from related party | $ 15,000 | ||||||||
China Minsheng Banking [Member] | Ever Glory Apparel [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | $ 2,900 | ||||||||
Line of credit extended maturity date | Jun. 30, 2019 | ||||||||
Line of credit annual interest rates | 4.79% | ||||||||
Borrowed loans from related party | $ 2,900 | ||||||||
China Minsheng Banking [Member] | Ever Glory Apparel [Member] | CNY [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | $ 20,000 | ||||||||
Borrowed loans from related party | $ 20,000 | ||||||||
Goldenway [Member] | Ever Glory Apparel [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit extended maturity date | Nov. 30, 2019 | ||||||||
Line of credit annual interest rates | 3.92% | ||||||||
Goldenway [Member] | Nanjing Bank [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | 7,300 | ||||||||
Goldenway [Member] | Nanjing Bank [Member] | CNY [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | $ 50,000 | ||||||||
Bank Of China [Member] | Ever Glory Apparel [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | $ 8,700 | ||||||||
Unused line of credit | $ 5,800 | ||||||||
Bank Of China [Member] | Ever Glory Apparel [Member] | CNY [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | $ 60,000 | ||||||||
Bank Of Communications [Member] | Nanjing Bank [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | 20,000 | ||||||||
Unused line of credit | $ 300 | ||||||||
Line of credit extended maturity date | Nov. 30, 2019 | ||||||||
Line of credit annual interest rates | 4.57% | ||||||||
Borrowed loans from related party | $ 2,900 | ||||||||
Bank Of Communications [Member] | Nanjing Bank [Member] | CNY [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Borrowed loans from related party | 18,000 | ||||||||
China Everbright Bank [Member] | Ever Glory Apparel [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | $ 5,800 | ||||||||
Unused line of credit | $ 4,300 | ||||||||
Line of credit extended maturity date | Apr. 30, 2019 | ||||||||
Line of credit annual interest rates | 4.57% | ||||||||
Borrowed loans from related party | $ 1,500 | ||||||||
China Everbright Bank [Member] | Ever Glory Apparel [Member] | CNY [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | $ 40,000 | ||||||||
Borrowed loans from related party | 10,000 | ||||||||
Shanghai Pudong Development Bank [Member] | Ever Glory Apparel [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | $ 2,900 | ||||||||
Unused line of credit | $ 300 | ||||||||
Line of credit extended maturity date | Nov. 30, 2019 | ||||||||
Line of credit annual interest rates | 4.57% | ||||||||
Borrowed loans from related party | $ 2,600 | ||||||||
Shanghai Pudong Development Bank [Member] | Ever Glory Apparel [Member] | CNY [Member] | |||||||||
Bank Loans (Textual) | |||||||||
Line of credit agreement amount | 20,000 | ||||||||
Borrowed loans from related party | $ 1,800 |
Derivative Liability (Details)
Derivative Liability (Details) € in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017EUR (€)Contract | |
Derivative Liability (Textual) | ||
Number of foreign exchange contracts | Contract | 5 | |
Derivative notional amount | € | € 1,680 | |
Foreign currency swap contracts, description | Ever-Glory Apparel had entered into different foreign currency swap contracts to exchange $6.0 million for equivalent RMB with Bank of China in May, entered into a foreign currency swap contract to exchange $3.0 million for equivalent RMB with Industrial and Commercial Bank of China in June and entered into a foreign currency swap contract to exchange $6.0 million and $4.0 million for equivalent RMB with Shanghai Pudong Development Bank in July. The terms of three foreign currency contracts are both six months and the contract of $4.0 million with Shanghai Pudong Development Bank is three months. Ever-Glory Apparel and the banks swapped two currencies by same pre-determined exchange rate at the beginning and end of the contracts. During the period, the Company pays annual interest of 1.43% for the RMB received and receives no interest for the USD exchanged with the Bank of China and Industrial and Commercial Bank of China. The company pays annual interest of 0.98% for the RMB received and receives 0.0001% interest for the USD exchanged with Shanghai Pudong Development Bank. If the Company failed to execute the exchange at the expiration of contracts, the banks would sell the USD at the market rate then the difference in RMB will be converted into bank loan for the Company. As of December 31, 2018, the fair value of principal amounts are included in other receivable ($4.0 million plus unrealized gain) and other payables (equivalent RMB payables) in the consolidated balance sheets, and unrealized gain of $0.2 million for the year ended December 31, 2018 is recognized in the income from operations. |
Income Tax (Details)
Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of Pre-tax income in jurisdictions | ||
Pre-tax income | $ 16,382 | $ 17,870 |
Others [Member] | ||
Summary of Pre-tax income in jurisdictions | ||
Pre-tax income | (20) | (10) |
PRC [Member] | ||
Summary of Pre-tax income in jurisdictions | ||
Pre-tax income | 16,384 | 17,881 |
BVI [Member] | ||
Summary of Pre-tax income in jurisdictions | ||
Pre-tax income | $ 18 | $ (1) |
Income Tax (Details 1)
Income Tax (Details 1) - PRC [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 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 | 6.60% | 6.40% |
Other | (1.40%) | 1.10% |
Effective income tax rate | 30.20% | 32.50% |
Income Tax (Details 2)
Income Tax (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of income tax expense | ||
Current | $ 7,115 | $ 7,177 |
Deferred | (1,370) | (1,530) |
Income tax expense | $ 4,942 | $ 5,805 |
Income Tax (Details Textual)
Income Tax (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Minimum [Member] | ||
Income Tax (Textual) | ||
Effective income tax reduction, percent | 9.00% | |
Maximum [Member] | ||
Income Tax (Textual) | ||
Effective income tax reduction, percent | 15.00% | |
Xizang (Tibet) [Member] | ||
Income Tax (Textual) | ||
PRC statutory rate | 15.00% | |
Subsidiaries [Member] | ||
Income Tax (Textual) | ||
U.S. deferred income taxes | $ 105,900 | |
Income tax, description | The statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017 | |
PRC [Member] | ||
Income Tax (Textual) | ||
PRC statutory rate | 25.00% | 25.00% |
Income tax rate for dividends distribution | 10.00% | |
HONG KONG | ||
Income Tax (Textual) | ||
PRC statutory rate | 16.50% |
Earnings Per Share (Details)
Earnings Per Share (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Basic and diluted earnings per share | ||
Weighted average number of common shares- Basic and diluted | 14,796,947 | 14,795,992 |
Earnings per share - basic and diluted | $ 0.81 | $ 0.84 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Oct. 19, 2017 | Feb. 28, 2017 | Jul. 26, 2016 | Dec. 31, 2018 | |
Stockholders' Equity (Textual) | ||||
Description of appropriations to the statutory surplus reserve | Appropriations to the statutory surplus reserve are to be at least 10% of the after tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entities' registered capital. | |||
Description of appropriations to the statutory public welfare fund | Appropriations to the statutory public welfare fund are 10% of the after tax net income determined in accordance with PRC GAAP. | |||
Condition to contribute to statutory fund reserve | Effective January 1, 2006, the Company is only required to contribute to one statutory reserve fund at 10% of net income after tax per annum, and any contributions are not to exceed 50% of the respective companies' registered capital. | |||
Percentage of registered capital contributed to statutory reserve as per PRC law | 50.00% | |||
Ever Glory Apparel [Member] | ||||
Stockholders' Equity (Textual) | ||||
Appropriations made to statutory reserve | $ 590 | |||
Goldenway [Member] | ||||
Stockholders' Equity (Textual) | ||||
Appropriations made to statutory reserve | 330 | |||
Shanghai La GO GO [Member] | ||||
Stockholders' Equity (Textual) | ||||
Appropriations made to statutory reserve | 80 | |||
Jiangsu La GO GO [Member] | ||||
Stockholders' Equity (Textual) | ||||
Appropriations made to statutory reserve | $ 290 | |||
Two Independent Directors Two [Member] | ||||
Stockholders' Equity (Textual) | ||||
Common stock shares issued to independent directors | 3,156 | |||
Common stock issued at five days average market price | $ 2.37 | |||
Number of days used to calculation average market price of common stock, description | Five days before the grant date. | |||
Two Independent Directors One [Member] | ||||
Stockholders' Equity (Textual) | ||||
Common stock shares issued to independent directors | 2,354 | |||
Common stock issued at five days average market price | $ 2.14 | |||
Number of days used to calculation average market price of common stock, description | Five days before the grant date. | |||
Two Independent Directors [Member] | ||||
Stockholders' Equity (Textual) | ||||
Common stock shares issued to independent directors | 2,542 | 2,206 | ||
Common stock issued at five days average market price | $ 1.96 | $ 3.39 | ||
Number of days used to calculation average market price of common stock, description | Five days before the grant date. | Five days before the grant date. |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of other expenses due to related parties | ||
Total | $ 336 | $ 313 |
Kunshan Enjin [Member] | ||
Summary of other expenses due to related parties | ||
Total | 94 | 44 |
Jiangsu Ever-Glory [Member] | ||
Summary of other expenses due to related parties | ||
Total | 47 | |
Chuzhou Huarui [Member] | ||
Summary of other expenses due to related parties | ||
Total | 217 | 222 |
EsC'Lav [Member] | ||
Summary of other expenses due to related parties | ||
Total | $ 25 |
Related Party Transactions (D_2
Related Party Transactions (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||
Total | $ 25,128 | $ 23,789 |
Chuzhou Huarui [Member] | ||
Related Party Transaction [Line Items] | ||
Total | 6,356 | 4,155 |
Ever-Glory Cambodia [Member] | ||
Related Party Transaction [Line Items] | ||
Total | 179 | |
Ever-Glory Vietnam [Member] | ||
Related Party Transaction [Line Items] | ||
Total | 14,718 | 15,998 |
Nanjing Ever-Kyowa [Member] | ||
Related Party Transaction [Line Items] | ||
Total | 1,566 | 1,577 |
EsC’Lav [Member] | ||
Related Party Transaction [Line Items] | ||
Total | 50 | 20 |
Fengyang Huarui [Member] | ||
Related Party Transaction [Line Items] | ||
Total | $ 2,438 | $ 1,860 |
Related Party Transactions (D_3
Related Party Transactions (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of accounts payable - related parties | ||
Total | $ 4,756 | $ 4,675 |
Chuzhou Huarui [Member] | ||
Summary of accounts payable - related parties | ||
Total | 888 | 1,152 |
Nanjing Knitting [Member] | ||
Summary of accounts payable - related parties | ||
Total | 171 | 114 |
Ever-Glory Vietnam [Member] | ||
Summary of accounts payable - related parties | ||
Total | 1,863 | 1,934 |
Nanjing Ever-Kyowa [Member] | ||
Summary of accounts payable - related parties | ||
Total | 580 | 900 |
Esc’elav [Member] | ||
Summary of accounts payable - related parties | ||
Total | 6 | |
Jiangsu Ever-Glory [Member] | ||
Summary of accounts payable - related parties | ||
Total | 632 | 110 |
Fengyang Huarui [Member] | ||
Summary of accounts payable - related parties | ||
Total | $ 622 | $ 459 |
Related Party Transactions (D_4
Related Party Transactions (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of amounts due from related parties | ||
Total | $ 192 | $ 265 |
Escelav [Member] | ||
Summary of amounts due from related parties | ||
Total | 70 | |
Jiangsu Ever-Glory [Member] | ||
Summary of amounts due from related parties | ||
Total | $ 122 | $ 265 |
Related Party Transactions (D_5
Related Party Transactions (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2012 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 01, 2015 | |
Related Party Transactions (Textual) | ||||
Net profit (loss) | $ 12,008 | $ 12,459 | ||
Sub-contracts with related parties | 25,128 | 23,789 | ||
Sub-contractors fees | 10,354 | 15,449 | ||
Ever Glory Vietnam [Member] | ||||
Related Party Transactions (Textual) | ||||
Sub-contracts with related parties | 14,718 | 15,998 | ||
Fengyang Huarui [Member] | ||||
Related Party Transactions (Textual) | ||||
Sub-contracts with related parties | 2,438 | 1,860 | ||
Nanjing Ever Kyowa [Member] | ||||
Related Party Transactions (Textual) | ||||
Sub-contracts with related parties | 1,566 | 1,577 | ||
Chuzhou Huarui [Member] | ||||
Related Party Transactions (Textual) | ||||
Sub-contracts with related parties | $ 6,356 | 4,155 | ||
Ever Glory Enterprises [Member] | ||||
Related Party Transactions (Textual) | ||||
Acquired interest | 83.00% | |||
Wubijia [Member] | ||||
Related Party Transactions (Textual) | ||||
Other income from related parties | $ 96,556 | 54,081 | ||
Amount paid through the consignment | 79,925 | 42,241 | ||
Net profit (loss) | 16,631 | 11,840 | ||
Nanjing Knitting [Member] | ||||
Related Party Transactions (Textual) | ||||
Other income from related parties | 4,452 | 6,443 | ||
Amount paid through the consignment | 0 | 11,661 | ||
Net profit (loss) | 0 | (5,218) | ||
Purchase of raw material | 1,440 | 1,390 | ||
Line of credit facility, collateral amount | 29,900 | 31,600 | ||
Nanjing Knitting [Member] | CNY [Member] | ||||
Related Party Transactions (Textual) | ||||
Line of credit facility, collateral amount | 205,500 | 205,500 | ||
Escelav [Member] | ||||
Related Party Transactions (Textual) | ||||
Rental income | 0 | 14,638 | ||
Sub-contracts with related parties | 50 | 20 | ||
Jiangsu Ever Glory [Member] | ||||
Related Party Transactions (Textual) | ||||
Purchase of raw material | 1,400 | 300 | ||
Company sold raw materials | 1,100 | 49,967 | ||
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 | 33,400 | 49,500 | ||
Counter guaranty provided by parent company on lines of credit | 9,900 | |||
Currency exchange adjustment | $ 500 | |||
Percentage of reduced guarantee | 29.70% | |||
Accrued interest | $ 500 | 2,600 | ||
Value of equity reduction | $ 10,400 | 15,400 | ||
Interest charged on net amounts due | 0.50% | |||
Bank interest rate | 0.41% | |||
Interest income payable to related party | $ 700 | 800 | ||
Repayment received under counter guarantee | 10,800 | |||
Jiangsu Ever Glory [Member] | Counter Guarantee Agreement [Member] | ||||
Related Party Transactions (Textual) | ||||
Outstanding due from Jiangsu Ever-Glory | 8,400 | 12,800 | ||
Jiangsu Ever Glory [Member] | CNY [Member] | ||||
Related Party Transactions (Textual) | ||||
Guarantee on lines of credit | 230,000 | 322,000 | ||
Counter guaranty provided by parent company on lines of credit | 68,200 | |||
Repayment received under counter guarantee | 71,100 | |||
Jiangsu Ever Glory [Member] | CNY [Member] | Counter Guarantee Agreement [Member] | ||||
Related Party Transactions (Textual) | ||||
Outstanding due from Jiangsu Ever-Glory | 55,700 | 83,600 | ||
Edward Yihua Kang [Member] | ||||
Related Party Transactions (Textual) | ||||
Guarantee on lines of credit | 14,500 | 21,500 | ||
Edward Yihua Kang [Member] | CNY [Member] | ||||
Related Party Transactions (Textual) | ||||
Guarantee on lines of credit | $ 100,000 | $ 140,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Summary of future minimum lease payments | |
2019 | $ 409 |
2020 | 409 |
2021 | 409 |
2022 | 409 |
2023 | 423 |
Thereafter | 13,487 |
Total | $ 15,546 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jan. 31, 2019 | |
Subsequent Event [Member] | |||
Commitments and Contingencies (Textual) | |||
Right-of-use assets and lease liabilities | $ 56,500 | ||
Operating Lease Commitment [Member] | |||
Commitments and Contingencies (Textual) | |||
Rental expenses | $ 48,030 | $ 51,040 | |
CNY [Member] | Subsequent Event [Member] | |||
Commitments and Contingencies (Textual) | |||
Right-of-use assets and lease liabilities | $ 373,300 | ||
Chuzhou Huarui [Member] | |||
Commitments and Contingencies (Textual) | |||
Lease term | The lease term is one year and can be renewed once a year. | ||
Lease expiration date | Dec. 31, 2018 | ||
Rental expenses | $ 216,890 | 222 | |
Annual rental under operating lease agreement | 200 | ||
Chuzhou Huarui [Member] | CNY [Member] | |||
Commitments and Contingencies (Textual) | |||
Annual rental under operating lease agreement | $ 1,500 | ||
Kunshan Enjin [Member] | |||
Commitments and Contingencies (Textual) | |||
Lease term | The lease term is one year and can be renewed once a year. | ||
Lease expiration date | Dec. 31, 2018 | ||
Rental expenses | $ 93,948 | 44,231 | |
Annual rental under operating lease agreement | 43 | 43 | |
Kunshan Enjin [Member] | CNY [Member] | |||
Commitments and Contingencies (Textual) | |||
Annual rental under operating lease agreement | $ 300 | ||
Shahe Village [Member] | |||
Commitments and Contingencies (Textual) | |||
Lease term | The term of the lease is 40 years starting from January 1, 2013, with an annual rent of $0.4 million (RMB 2.6 million) for the first 5 years. The rent will increase by $15,000 (RMB 0.1 million) every five years. | ||
Rental expenses | $ 400 | $ 400 | |
Annual rental under operating lease agreement | 400 | ||
Increase in annual rental under operating lease commitment | $ 15 | ||
Operating lease rent term | 5 years | ||
Shahe Village [Member] | CNY [Member] | |||
Commitments and Contingencies (Textual) | |||
Annual rental under operating lease agreement | $ 2,600 | ||
Increase in annual rental under operating lease commitment | $ 100 |
Concentrations and Risks (Detai
Concentrations and Risks (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues earned in geographic areas | ||
Revenues | $ 448,508 | $ 415,581 |
Wholesale Business [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 218,609 | 190,236 |
Retail Business [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 229,899 | 225,345 |
Mainland China [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 89,269 | 65,811 |
Hong Kong China [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 38,106 | 39,738 |
Germany [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 6,748 | 8,901 |
United Kingdom | ||
Revenues earned in geographic areas | ||
Revenues | 15,460 | 12,417 |
Europe Other [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 30,747 | 34,804 |
Japan [Member] | ||
Revenues earned in geographic areas | ||
Revenues | 7,583 | 3,515 |
United States [Member] | ||
Revenues earned in geographic areas | ||
Revenues | $ 30,696 | $ 25,050 |
Concentrations and Risks (Det_2
Concentrations and Risks (Details Textual) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)CustomerManufacturersMU | Dec. 31, 2017USD ($)ManufacturersMU | |
Retail Business [Member] | Raw Material Suppliers One [Member] | ||
Concentrations and Risks (Textual) | ||
Concentration risk, percentage | 24.00% | 11.70% |
Number of raw material suppliers | 4 | 6 |
Retail Business [Member] | Raw Material Supplier Two [Member] | ||
Concentrations and Risks (Textual) | ||
Concentration risk, percentage | 18.20% | 12.00% |
Number of raw material suppliers | 4 | 6 |
Retail Business [Member] | Raw Material Supplier Three [Member] | ||
Concentrations and Risks (Textual) | ||
Concentration risk, percentage | 15.10% | 13.30% |
Number of raw material suppliers | 4 | 6 |
Retail Business [Member] | Raw Material Suppliers Four [Member] | ||
Concentrations and Risks (Textual) | ||
Concentration risk, percentage | 13.90% | 13.90% |
Number of raw material suppliers | 4 | 6 |
Retail Business [Member] | Raw Material Suppliers Five [Member] | ||
Concentrations and Risks (Textual) | ||
Concentration risk, percentage | 15.70% | |
Number of raw material suppliers | 6 | |
Retail Business [Member] | Raw Material Suppliers Six [Member] | ||
Concentrations and Risks (Textual) | ||
Concentration risk, percentage | 17.10% | |
Number of raw material suppliers | 6 | |
Finished Goods [Member] | Retail Business [Member] | ||
Concentrations and Risks (Textual) | ||
Concentration risk, percentage | 10.00% | 10.00% |
Finished Goods [Member] | Wholesale Business [Member] | Manufacturer One [Member] | ||
Concentrations and Risks (Textual) | ||
Concentration risk, percentage | 18.10% | 24.00% |
Number of manufacturers | Manufacturers | 1 | 1 |
Raw Materials [Member] | Wholesale Business [Member] | ||
Concentrations and Risks (Textual) | ||
Concentration risk, percentage | 10.00% | 10.00% |
Sales Revenue, Net [Member] | ||
Concentrations and Risks (Textual) | ||
Concentration risk, percentage | 20.90% | 13.50% |
Number of customer | 1 | 1 |
Accounts Receivable [Member] | ||
Concentrations and Risks (Textual) | ||
Allowance for doubtful accounts | $ | $ 5,900 | $ 5,500 |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Segment profit or loss: | ||
Net revenue from external customers | $ 448,508 | $ 415,581 |
Income from operations | 15,019 | 14,749 |
Interest income | 1,375 | 1,260 |
Interest expense | 1,989 | 1,648 |
Depreciation and amortization | 6,664 | 7,015 |
Income tax expense | 4,942 | 5,805 |
Segment assets: | ||
Additions to property, plant and equipment | 12,182 | 8,564 |
Total assets | 252,271 | 244,992 |
Wholesale Segment [Member] | ||
Segment profit or loss: | ||
Net revenue from external customers | 218,609 | 190,236 |
Income from operations | 12,071 | 10,331 |
Interest income | 1,330 | 1,188 |
Interest expense | 1,667 | 1,275 |
Depreciation and amortization | 1,175 | 1,104 |
Income tax expense | 3,337 | 3,048 |
Segment assets: | ||
Additions to property, plant and equipment | 2,153 | 759 |
Total assets | 98,493 | 97,026 |
Retail Segment [Member] | ||
Segment profit or loss: | ||
Net revenue from external customers | 229,899 | 225,345 |
Income from operations | 2,948 | 4,418 |
Interest income | 45 | 72 |
Interest expense | 322 | 373 |
Depreciation and amortization | 5,489 | 5,911 |
Income tax expense | 1,605 | 2,757 |
Segment assets: | ||
Additions to property, plant and equipment | 10,029 | 7,805 |
Total assets | $ 153,778 | $ 147,966 |
Segments (Details Textual)
Segments (Details Textual) | 12 Months Ended |
Dec. 31, 2018Segment | |
Segments (Textual) | |
Number of segments | 2 |