Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 13, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Ever-Glory International Group, Inc. | |
Entity Central Index Key | 0000943184 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 14,809,160 | |
Entity File Number | 0-28806 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | FL |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 59,238 | $ 48,551 |
Restrict cash | 17,716 | 2,204 |
Trading securities | 825 | |
Accounts receivable, net | 45,766 | 78,053 |
Inventories | 51,254 | 67,355 |
Advances on inventory purchases | 5,726 | 9,681 |
Value added tax receivable | 1,340 | 2,495 |
Other receivables and prepaid expenses | 4,328 | 5,293 |
Amounts due from related parties | 329 | 123 |
Total Current Assets | 186,522 | 213,755 |
NONCURRENT ASSETS | ||
Intangible assets, net | 4,499 | 4,729 |
Property and equipment, net | 25,964 | 28,812 |
Operating lease right-of-use assets | 34,496 | 53,379 |
Deferred tax assets | 807 | 996 |
Total Non-Current Assets | 65,766 | 87,916 |
TOTAL ASSETS | 252,288 | 301,671 |
CURRENT LIABILITIES | ||
Bank loans | 40,271 | 29,931 |
Accounts payable | 51,169 | 72,418 |
Accounts payable and other payables - related parties | 4,050 | 4,811 |
Other payables and accrued liabilities | 10,118 | 19,137 |
Value added and other taxes payable | 1,657 | |
Income tax payable | 222 | 1,142 |
Current operating lease liabilities | 26,309 | 44,888 |
Total Current Liabilities | 132,139 | 173,984 |
NONCURRENT LIABILITIES | ||
Non-current operating lease liabilities | 8,256 | 8,537 |
TOTAL LIABILITIES | 140,395 | 182,521 |
COMMITMENTS AND CONTINGENCIES (Note 8) | ||
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, 14,804,832 and 14,801,770 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively) | 15 | 15 |
Additional paid-in capital | 3,645 | 3,640 |
Retained earnings | 99,833 | 106,328 |
Statutory reserve | 19,939 | 19,939 |
Accumulated other comprehensive (loss) | (6,031) | (4,330) |
Amounts due from related party | (3,996) | (4,932) |
Total equity attributable to stockholders of the Company | 113,405 | 120,660 |
Noncontrolling interest | (1,512) | (1,510) |
Total Equity | 111,893 | 119,150 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 252,288 | $ 301,671 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
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 | 14,804,832 | 14,801,770 |
Common stock, shares outstanding | 14,804,832 | 14,801,770 |
Consolidated Statements of Inco
Consolidated Statements of Income (loss) and Comprehensive Income (loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
NET SALES | $ 50,086 | $ 77,316 | $ 108,441 | $ 165,272 |
COST OF SALES | 35,641 | 48,330 | 77,958 | 106,928 |
GROSS PROFIT | 14,445 | 28,986 | 30,483 | 58,344 |
OPERATING EXPENSES | ||||
Selling expenses | 12,626 | 19,699 | 26,105 | 40,706 |
General and administrative expenses | 5,971 | 7,337 | 11,755 | 14,867 |
Total Operating Expenses | 18,597 | 27,036 | 37,860 | 55,573 |
(LOSS) INCOME FROM OPERATIONS | (4,152) | 1,950 | (7,377) | 2,771 |
OTHER INCOME (EXPENSES) | ||||
Interest income | 339 | 277 | 616 | 484 |
Interest expense | (566) | (408) | (907) | (771) |
Other income | 845 | 1,409 | 1,663 | 1,114 |
Total Other Income, Net | 618 | 1,278 | 1,372 | 827 |
(LOSS) INCOME BEFORE INCOME TAX EXPENSE | (3,534) | 3,228 | (6,005) | 3,598 |
Income tax expense | (266) | (1,455) | (493) | (2,280) |
NET (LOSS) INCOME | (3,800) | 1,773 | (6,498) | 1,318 |
Non-controlling interest | 6 | 83 | 3 | 17 |
NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY | (3,794) | 1,856 | (6,495) | 1,335 |
NET (LOSS) INCOME | (3,800) | 1,773 | (6,498) | 1,318 |
Foreign currency translation (loss) gain | (263) | (2,453) | (1,700) | 1,553 |
COMPREHENSIVE (LOSS) INCOME | (4,063) | (680) | (8,198) | 2,871 |
Comprehensive loss (income) attributable to the non-controlling interest | 8 | 49 | 2 | (51) |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY | $ (4,055) | $ (631) | $ (8,196) | $ 2,820 |
(LOSS) EARNINGS PER SHARE ATTRIBUTABLE TO THE COMPANY'S STOCKHOLDERS | ||||
Basic and diluted | $ (0.26) | $ 0.13 | $ (0.44) | $ 0.09 |
Weighted average number of shares outstanding Basic and diluted | 14,804,832 | 14,800,140 | 14,804,595 | 14,800,140 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional paid-in capital | Retained Earnings Unrestricted | Retained Earnings Statutory reserve | Accumulated other Comprehensive loss | Amounts due from related party | Total equity attributable to stockholders of the Company | Non-controlling Interest | Total |
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 | ||||||||
Stock issued for compensation | $ 0 | 8 | 8 | 8 | |||||
Stock issued for compensation, shares | 1,942 | ||||||||
Net (loss) income | (521) | (521) | 66 | (455) | |||||
Net cash received from related party under counter guarantee agreement | 1,101 | 1,101 | 1,101 | ||||||
Foreign currency translation loss | 3,972 | 3,972 | 34 | 4,006 | |||||
Balance at Mar. 31, 2019 | $ 15 | 3,635 | 105,393 | 19,083 | 394 | (9,253) | 119,267 | (1,451) | 117,816 |
Balance, shares at Mar. 31, 2019 | 14,800,140 | ||||||||
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 | ||||||||
Net (loss) income | 1,318 | ||||||||
Balance at Jun. 30, 2019 | $ 15 | 3,635 | 107,249 | 19,083 | (2,093) | (7,863) | 120,026 | (1,500) | 118,526 |
Balance, shares at Jun. 30, 2019 | 14,800,140 | ||||||||
Balance at Mar. 31, 2019 | $ 15 | 3,635 | 105,393 | 19,083 | 394 | (9,253) | 119,267 | (1,451) | 117,816 |
Balance, shares at Mar. 31, 2019 | 14,800,140 | ||||||||
Net (loss) income | 1,856 | 1,856 | (83) | 1,773 | |||||
Net cash received from related party under counter guarantee agreement | 1,390 | 1,390 | 1,390 | ||||||
Foreign currency translation loss | (2,487) | (2,487) | 34 | (2,453) | |||||
Balance at Jun. 30, 2019 | $ 15 | 3,635 | 107,249 | 19,083 | (2,093) | (7,863) | 120,026 | (1,500) | 118,526 |
Balance, shares at Jun. 30, 2019 | 14,800,140 | ||||||||
Balance at Dec. 31, 2019 | $ 15 | 3,640 | 106,328 | 19,939 | (4,330) | (4,932) | 120,660 | (1,510) | 119,150 |
Balance, shares at Dec. 31, 2019 | 14,801,770 | ||||||||
Stock issued for compensation | $ 0 | 5 | 5 | 5 | |||||
Stock issued for compensation, shares | 3,062 | ||||||||
Net (loss) income | (2,701) | (2,701) | 3 | (2,698) | |||||
Net cash received from related party under counter guarantee agreement | 785 | 785 | 785 | ||||||
Foreign currency translation loss | (1,440) | (1,440) | 3 | (1,437) | |||||
Balance at Mar. 31, 2020 | $ 15 | 3,645 | 103,627 | 19,939 | (5,770) | (4,147) | 117,309 | (1,504) | 115,805 |
Balance, shares at Mar. 31, 2020 | 14,804,832 | ||||||||
Balance at Dec. 31, 2019 | $ 15 | 3,640 | 106,328 | 19,939 | (4,330) | (4,932) | 120,660 | (1,510) | 119,150 |
Balance, shares at Dec. 31, 2019 | 14,801,770 | ||||||||
Net (loss) income | (6,498) | ||||||||
Balance at Jun. 30, 2020 | $ 15 | 3,645 | 99,833 | 19,939 | (6,031) | (3,996) | 113,405 | (1,512) | 111,893 |
Balance, shares at Jun. 30, 2020 | 14,804,832 | ||||||||
Balance at Mar. 31, 2020 | $ 15 | 3,645 | 103,627 | 19,939 | (5,770) | (4,147) | 117,309 | (1,504) | 115,805 |
Balance, shares at Mar. 31, 2020 | 14,804,832 | ||||||||
Net (loss) income | (3,794) | (3,794) | (6) | (3,800) | |||||
Net cash received from related party under counter guarantee agreement | 151 | 151 | 151 | ||||||
Foreign currency translation loss | (261) | (261) | (2) | (263) | |||||
Balance at Jun. 30, 2020 | $ 15 | $ 3,645 | $ 99,833 | $ 19,939 | $ (6,031) | $ (3,996) | $ 113,405 | $ (1,512) | $ 111,893 |
Balance, shares at Jun. 30, 2020 | 14,804,832 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (loss) income | $ (6,498) | $ 1,318 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 3,597 | 4,491 |
Loss from sale of property and equipment | 189 | 53 |
Provision of bad debt allowance | 969 | 682 |
Provision for obsolete inventories | 3,681 | 1,824 |
Deferred income tax | 71 | (1,461) |
Stock-based compensation | 3 | 8 |
Changes in operating assets and liabilities | ||
Accounts receivable | 30,444 | 21,793 |
Inventories | 11,659 | 1,145 |
Value added tax receivable | 1,076 | 504 |
Other receivables and prepaid expenses | 737 | 3,502 |
Advances on inventory purchases | 3,845 | (2,353) |
Amounts due from related parties | (214) | (129) |
Accounts payable | (22,522) | (25,954) |
Accounts payable and other payables- related parties | (466) | 58 |
Other payables and accrued liabilities | (7,027) | (10,789) |
Value added and other taxes payable | (1,593) | (4,684) |
Income tax payable | (910) | 207 |
Net cash provided (used in) operating activities | 17,041 | (9,785) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (1,018) | (4,082) |
Purchases of trading securities | (825) | |
Net cash used in investing activities | (1,843) | (4,082) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from bank loans | 31,995 | 16,320 |
Repayment of bank loans | (21,173) | (19,904) |
Repayment of loans from related party | 4,027 | 8,149 |
Advances to related party | (3,129) | (5,454) |
Net cash provided (used in) financing activities | 11,720 | (889) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (721) | 2,270 |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 26,197 | (12,486) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD | 48,551 | 47,012 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 59,238 | 34,526 |
Reconciliation of cash, cash equivalents and restricted cash reported within their consolidated balance sheets: | ||
Cash and Cash Equivalents | 59,236 | 47,012 |
Restricted cash | 17,716 | |
Total | 76,954 | 47,012 |
Cash paid during the period for: | ||
Interest | 907 | 771 |
Income taxes | $ 493 | $ 2,436 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | NOTE 1 Nature of Operations and Basis of Presentation Ever-Glory International Group, Inc. (the "Company" or "We" or "Ours"), together with its subsidiaries, is an apparel manufacturer, supplier and retailer in The People's Republic of China ("China" or "PRC"), with a wholesale segment and a retail segment. The Company's wholesale business consists of recognized brands for department and specialty stores located in China, Europe, Japan and the United States. The Company's retail business consists of flagship stores and store-in-stores for the Company's own-brand products. The Company's wholesale operations are provided primarily through the Company's wholly-owned PRC subsidiaries, Goldenway Nanjing Garments Co. Ltd. ("Goldenway"), Nanjing Catch-Luck Garments Co. Ltd. ("Catch-Luck"), Nanjing New-Tailun Garments Co. Ltd ("New-Tailun"), Haian Tai Xin Garments Trading Company Limited ("Haian Tai Xin"), Ever-Glory International Group Apparel Inc.("Ever-Glory Apparel"), Chuzhou Huirui Garments Co. Ltd. ("Huirui") and Nanjing Tai Xin Garments Trading Company Limited ("Tai Xin"), and the Company's wholly-owned Samoa subsidiary, Ever-Glory International Group (HK) Ltd. ("Ever-Glory HK") and Ever-Glory Supply Chain Service Co., Limited ("Ever-Glory Supply Chain"). The Company's retail operations are provided through its wholly- owned subsidiaries, Shanghai LA GO Fashion Company Limited ("Shanghai LA GO GO"), Jiangsu LA GO Fashion Company Limited ("Jiangsu LA GO GO"), Tianjin LA GO Fashion Company Limited ("Tianjin LA GO GO"), Shanghai Ya Lan Fashion Company Limited ("Ya Lan"), Shanghai Yiduo Fashion Company Limited ("Shanghai Yiduo") and Xizang He Meida Trading Company Limited ("He Meida"). In March 2020, the Company incorporated Nanjing Rui Lian Technology Company Limited ("Nanjing Rui Lian") and it is the Company's wholly-owned PRC subsidiaries. Nanjing Rui Lian is engaged in the business of garments trading. In the opinion of management, the accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the condensed consolidated balance sheet as of June 30, 2020 the condensed consolidated statements of income (loss) and comprehensive income (loss), condensed consolidated statements of equity, and cash flows for the three and six months ended June 30, 2020 and 2019. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the instructions to Rule 8-03 of Regulation S-X of the Securities and the SEC. Accordingly, they have been condensed and do not include all of the information and footnotes required by GAAP for complete financial statements. Wholesale revenues are generally higher in the third and fourth fiscal quarters, while retail revenues are generally higher in the first and fourth fiscal quarters. The results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results of operations to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2019. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SIGNIFICANT ACCOUNTING POLICIES The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 30, 2020 ("2019 Form 10-K.") 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. As of June 30, 2020 and 2019, the Company's financial assets (all Level 1) consist of cash placed with financial institutions and trading securities 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. The Company has adopted ASC 825-10 " Financial Instruments As of June 30, 2020, the Company's financial assets (all Level 1) consist of cash placed with financial institutions and trading securities (nil at December 31, 2019) with brokerage accounts that management considers to be high quality. Foreign Currency Translation and Other Comprehensive Income The reporting currency of the Company is the U.S. dollar. The functional currency of Ever-Glory, Perfect Dream, Ever-Glory HK and Ever-Glory Supply Chain is the U.S. dollar. The functional currency of Goldenway, New Tailun, Catch-luck, Ever-Glory Apparel, Shanghai LA GO GO, Jiangsu LA GO GO, Tianjin LA GO GO, Shanghai Yiduo, Ya Lan, He Meida, Huirui, Taixin, Haian Taixin and Nanjing Rui Lian is the Chinese RMB . For subsidiaries whose functional currency is the RMB, all assets and liabilities were translated at the exchange rate at the balance sheet date; equity was translated at historical rates and items in the statement of comprehensive income were translated at the average rate for the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income. The resulting translation gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Items in the cash flow statement are translated at the average exchange rate for the period. Use of Estimates In preparing our condensed consolidated financial statements, we use estimates and assumptions that affect the reported amounts and disclosures. Our estimates are often based on complex judgments, probabilities and assumptions that we believe to be reasonable, but that are inherently uncertain and unpredictable. We are also subject to other risks and uncertainties that may cause actual results to differ from estimated amounts. Significant estimates include the assumptions used to value tax liabilities, derivative financial instruments, the estimates of the allowance for deferred tax assets, and the accounts receivable allowance, and impairment of long-lived assets and inventory write off. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" 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. Reclassification Certain amounts in the prior period presented have been reclassified to conform to the current year presentation. There was no impact on previously reported assets, net income or total cash flows. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3 INVENTORIES Inventories at June 30, 2020 and December 31, 2019 consisted of the following: June 30, December 31, (In thousands of Raw materials $ 1,451 $ 1,468 Work-in-progress 9,954 8,025 Finished goods 39,849 57,862 Total inventories $ 51,254 $ 67,355 |
Bank Loans
Bank Loans | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
BANK LOANS | NOTE 4 BANK LOANS Bank loans represent amounts due to various banks and are generally due on demand or within one year. These loans can be renewed with the banks. Short term bank loans consisted of the following as of June 30, 2020 and December 31, 2019. June 30, December 31, Bank (In thousands of Industrial and Commercial Bank of China $ 19,782 $ 18,629 Shanghai Pudong Development Bank 15,543 - China Minsheng Bank 2,826 2,866 Bank of China 2,120 - Nanjing Bank - 6,449 Bank of Communications - 1,426 HSBC - 561 $ 40,271 $ 29,931 In April 2020, Ever-Glory Apparel entered into a line of credit agreement for approximately $4.2 million (RMB30.0 million) with Bank of China and guaranteed by Jiangsu Ever-Glory. These loans are also collateralized by assets of Jiangsu Ever-Glory's equity investee, Chuzhou Huarui, under a collateral agreement executed by Ever-Glory Apparel, Chuzhou Huarui and Bank of China. As of June 30, 2020, Ever-Glory Apparel had borrowed $2.1 million (RMB 15.0 million) under this line of credit with an annual interest rate of 4.57% and due on September 2020. As of June 30, 2020, approximately $2.1 million was unused and available under this line of credit. In December 2019, Goldenway entered into a line of credit agreement with Industrial and Commercial Bank of China, which allows the Company to borrow up to approximately $5.7 million (RMB40.0 million). These loans are collateralized by the Company's property and equipment. As of June 30, 2020, Goldenway had borrowed $5.7 million (RMB40.0 million) from Industrial and Commercial Bank of China with an annual interest rate 4.57% and due on August 2020. In November 2018, Ever-Glory Apparel entered into a line of credit agreement for approximately $14.1 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 June 30, 2020, Ever-Glory Apparel had borrowed $14.1 million (RMB 100.0 million) under this line of credit with annual interest rates ranging from 3.92% to 4.35% and due on from September 2020 to May 2021. In September 2019, Ever-Glory Apparel entered into a line of credit agreement for approximately $5.7 million (RMB40.0 million) with the Shanghai Pudong Development Bank and guaranteed by Goldenway. As of June 30, 2020, approximately $5.7 million was unused and available under this line of credit. In March 2020, Ever-Glory Apparel entered into a certificate of three-year time deposit of $15.5 million (RMB110.0 million) with the Shanghai Pudong Development Bank with annual interest rates ranging from 3.85% to 3.99%. In April 2020, Ever-Glory Apparel pledged the certificate of three-year time deposit to the Shanghai Pudong Development Bank and Ever-Glory Apparel had borrowed $15.5 million (RMB 110.0 million) under this line of certificate with an annual interest rate of 2.02% and due on July 2020. In October 2019, LA GO GO entered into a line of credit agreement for approximately $2.8 million (RMB20.0 million) with China Minsheng Bank and guaranteed by Ever-Glory Apparel and Mr. Kang. As of June 30, 2020, LA GO GO had borrowed $2.8 million (RMB20.0 million) from China Minsheng Bank with an annual interest rate of 5.0% and due in November 2020. In August 2018, Goldenway entered into a line of credit agreement with Nanjing Bank, which allows the Company to borrow up to approximately $7.1 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 June 30, 2020, approximately $7.1 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 $8.5 million (RMB60.0 million) with Nanjing Bank and guaranteed by Jiangsu Ever-Glory, Mr. Kang and Goldenway. As of June 30, 2020, approximately $8.5 million was unused and available under this line of credit. In June 2019, LA GO GO entered into a revolving line of credit agreement with Nanjing Bank, which allows the Company to borrow up to approximately $2.8 million (RMB20.0 million). The line of credit is guaranteed by Mr. Kang and Goldenway. As of June 30, 2020, approximately $2.8 million was unused and available under this line of credit. In September 2019, LA GO GO entered into a line of credit agreement for approximately $2.8 million (RMB20.0 million) with the Bank of Communications and guaranteed by Jiangsu Ever-Glory, Ever-Glory Apparel and Jiangsu LAGOGO. As of June 30, 2020, approximately $2.8 million was unused and available under this line of credit. In August 2019, Ever-Glory Apparel and Goldenway collectively entered into a secured banking facility agreement for a combined revolving import facility, letter of credit, invoice financing facilities and a credit line for treasury products of up to $2.5 million with the Nanjing Branch of HSBC (China) Company Limited ("HSBC"). This agreement is guaranteed by the Company and Mr. Kang. As of June 30, 2020, approximately $2.5 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 $0.9 million and $0.8 million for the six months ended June 30, 2020 and 2019, respectively, and $0.6 million and $0.4 million for the three months ended June 30, 2020 and 2019, respectively |
Income Tax
Income Tax | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 5 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, 2020. 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, its income tax rate is 8.25% when its profit is under HKD 2.0 million and its income tax rate is 16.5% when its profit is over HKD 2.0 million. 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 (loss) income for the three and six months ended June 30, 2020 and 2019 was taxable in the following jurisdictions: Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 (In thousands of U.S. Dollars) PRC $ (3,531 ) $ 3,228 $ (6,000 ) $ 3,605 Others (3 ) - (5 ) (7 ) $ (3,534 ) $ 3,228 $ (6,005 ) $ 3,598 The following table reconciles the PRC statutory rates to the Company's effective tax rate for the three and six months ended June 30, 2020 and 2019: Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 PRC statutory rate 25.0 % 25.0 % 25.0 % 25.0 % Temporary difference between US GAAP and PRC tax accounting (32.5 ) 20.1 (33.2 ) 38.4 Effective income tax rate (7.5 )% 45.1 % (8.2 )% 63.4 % Income tax expense for the three and six months ended June 30, 2020 and 2019 is as follows: Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 Current $ 195 $ 1,785 $ 304 $ 1,990 Deferred 71 (330 ) 189 290 Income tax expense $ 266 $ 1,455 $ 493 $ 2,280 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 $99.9 million of its non-U.S. subsidiaries' undistributed earnings because such amounts are intended to be reinvested outside the United States indefinitely. On December 22, 2017 the U.S. enacted the "Tax Cuts and Jobs Act" ("U.S. Tax Reform") which made significant changes to corporate income tax law. One significant change was to decrease the general corporate income tax rate from 34% to 21%. This reduction had no effect on the Company's income tax expense as the reduction in deferred tax assets was offset by an equivalent reduction in the valuation allowance. Another significant change resulting from U.S. Tax Reform is that any future remittances to the parent company from business income earned by its subsidiaries outside of the U.S. will no longer to taxable to the Company under U.S. tax law. The Company would be liable for payment of income tax, or reduction of the net operating loss carryover, at a reduced rate for any accumulated earnings and profits of its non-U.S. subsidiaries at December 31, 2017. U.S. Tax Reform includes provisions for Global Intangible Low-Taxed Income ("GILTI") under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries and for Base Erosion and Anti-Abuse Tax ("BEAT") under which taxes are imposed on certain base eroding payments to affiliated foreign companies. Consistent with accounting guidance, we treat BEAT as a period tax charge in the period the tax is incurred and have made an accounting policy election to treat GILTI taxes in a similar manner. 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 changed for the three and six months ended June 30, 2020. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 6 STOCKHOLDERS' EQUITY On January 31, 2019, the Company issued 1,942 shares of the Company's common stock to two of the Company's independent directors as compensation for their services rendered during the third and fourth quarter of 2018. The shares issued in 2019 were valued at $3.80 per share, which was the average market price of the common stock for the five days before the grant date. On January 15, 2020, the Company issued 3,062 shares of Company's common stock to two of the Company's independent directors as compensation for their services rendered during the third and fourth quarter of 2019. The shares issued in 2020 were valued at $1.41 per share, which was the average market price of the common stock for the five days before the grant date. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 7 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 certain Company's retail stores since the third quarter of 2014. During the three and six months ended June 30, 2020 and 2019, the Company received $5,504, $8,021, $14,176 and $45,655 from the customers and paid $5,504, $8,021, $13,248 and $39,086 to Wubijia through the consignment, respectively. The net income of $0, $0, $928 and $6,570 was recorded as other income (expenses) during the three and six months ended June 30, 2020 and 2019, respectively. Other expenses due to Related Parties Included in other expenses for the three and six months ended June 30, 2020 and 2019 are rent costs due to entities controlled by Mr. Kang under operating lease agreements as follows: Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 (In thousands of U.S. Dollars) Chuzhou Huarui 52 35 102 88 Kunshan Enjin 21 22 43 44 Total $ 73 $ 57 $ 145 $ 132 The Company leases Chuzhou Huarui and Kunshan Enjin's warehouse spaces because the locations are convenient for transportation and distribution. Purchases from and Sub-contracts with Related Parties The Company purchased raw materials from Nanjing Knitting totaling $0 million, $0 million, $0.4 million and $0.6 million during the three and six months ended June 30, 2020 and 2019, respectively. In addition, sub-contracts with related parties included in cost of sales for the three and six months ended June 30, 2020 and 2019 are as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands of U.S. Dollars) Chuzhou Huarui $ 477 $ 1,960 $ 990 $ 3,467 Fengyang Huarui 242 442 400 548 Nanjing Ever-Kyowa 188 408 442 755 Ever-Glory Vietnam 3,595 2,469 5,479 5,048 Nanjing Knitting 487 600 487 600 EsCeLav 14 13 24 101 Jiangsu Ever-Glory 381 45 627 470 $ 5,384 $ 5,937 $ 8,449 $ 10,989 Accounts Payable – Related Parties The accounts payable to related parties at June 30, 2020 and December 31, 2019 are as follows: 2020 2019 (In thousands of Ever-Glory Vietnam $ 1,993 2,260 Fengyang Huarui 140 414 Nanjing Ever-Kyowa 317 386 Chuzhou Huarui 1,341 1,064 Nanjing Knitting 254 186 Jiangsu Ever-Glory 5 501 Total $ 4,050 $ 4,811 Amounts Due From Related Parties-current assets The amounts due from related parties at June 30, 2020 and December 31, 2019 are as follows: 2020 2019 (In thousands of Jiangsu Ever-Glory 329 123 Total $ 329 $ 123 Jiangsu Ever-Glory is an entity engaged in importing/exporting, apparel-manufacture, real-estate development, car sales and other activities. Jiangsu Ever-Glory is controlled by Mr. Kang. During three and six months ended June 30, 2020 and 2019, 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 a cost of $0.4 million, $0.6 million, $0 million and $0 million during the three and six months period ended June 30, 2020 and 2019, respectively. Jiangsu Ever-Glory purchased raw materials on the Company's behalf and sold to the Company at a cost of $0.4 million, $1.1 million, $0.1 million and $0.1 million during the three and six months ended June 30, 2020 and 2019, respectively. Amounts Due From Related Party under Counter Guarantee Agreement In March 2012, in consideration of the guarantees and collateral provided by Jiangsu Ever-Glory and Nanjing Knitting, the Company agreed to provide Jiangsu Ever-Glory a counter guarantee in the form of cash of not less than 70% of the maximum aggregate lines of credit obtained by the Company. Jiangsu Ever-Glory is obligated to return the full amount of the counter-guarantee funds provided upon expiration or termination of the underlying lines of credit and is to pay annual interest at the rate of 6.0% of amounts provided. As of June 30, 2020 and December 31, 2019, Jiangsu Ever-Glory has provided guarantees for approximately $37.3 million (RMB 260 million) and $33.0 million (RMB 230 million) of lines of credit obtained by the Company, respectively. Jiangsu Ever-Glory and Nanjing Knitting have also provided their assets as collateral for certain of these lines of credit. The value of the collateral, as per appraisals obtained by the banks in connection with these lines of credit is approximately $29.2 million (RMB 205.5 million) and $29.4 million (RMB 205.5 million) as of June 30, 2020 and December 31, 2019, respectively. Mr. Kang has also provided a personal guarantee for $14.3 million (RMB 100.0 million) and $14.5 million (RMB 100.0 million) as of June 30, 2020 and December 31, 2019, respectively. At December 31, 2019, $4.7 million (RMB 32.8 million) was outstanding due from Jiangsu Ever-Glory under the counter guarantee agreement. During the six months ended June 30, 2020, an additional $3.1 million (RMB 22.0 million) was provided to and $4.0 million (RMB 28.3 million) was received from Jiangsu Ever-Glory under the counter-guarantee. As of June 30, 2020, the amount of the counter-guarantee was $3.7 million (RMB 26.4 million) (the difference represents currency exchange adjustment of $0.1 million), which was 10.2% of the aggregate amount of lines of credit. Obtaining bank loan requires a higher guarantee deposit in this quarter. This amount plus accrued interest of $0.3 million have been classified as a reduction of equity, consistent with the guidance of SEC Staff Accounting Bulletins 4E and 4G. At June 30, 2020 and December 31, 2019, the amount classified as a reduction of equity was $4.0 million and $5.0 million, respectively. Interest of 0.5% is charged on net amounts due from Jiangsu Ever-Glory at each month end. Since January 1, 2019, interest rate has changed to 0.3625% as the bank benchmark interest rate decreased. Interest income for the three and six months ended June 30, 2020 and 2019 was approximately $0.01 million, $0.03 million, $0.1 million and $0.2 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 COMMITMENTS AND CONTINGENCIES Operating Lease Commitment The Company recognized operating lease liabilities and operating lease right-of-use assets on its balance sheets. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The company has leases with fixed payments for land-use-rights, warehouses and logistics centers, flagship stores, and leases with variable payments for stores within shopping malls ("shopping mall stores") in the PRC, which are classified as operating leases. Options to extend or renew are recognized as part of the lease liabilities and recognized as right of use assets. There are no residual value guarantees and no restrictions or covenants imposed by the leases. The weighted average remaining lease term excluding stores in the shopping malls is 31 years and the weighted average discount rate is 4.35%. The lease term for shopping mall stores is commonly one year with options to extend or renew, and the rent is predetermined with a percentage of sales. The Company estimates the next 12 months rent for the shopping mall stores by annualizing current period rent calculated with the percentage of sales. Thus, the ROU assets and lease liabilities may vary significantly at different period ends. In the six months ended June 30, 2020, the costs of the leases recognized in cost of revenues and general administrative expenses are $4.6 and $0.2 million, respectively. Cash paid for the operating leases including in the operating cash flows was $4.8 million. 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) 2020 387 2021 387 2022 387 2023 401 2024 401 Thereafter 12,374 $ 14,337 Legal Proceedings In March 2019, Shanghai La Go Go Fashion Company Limited ("LA GO GO") filed a complaint against Shanghai Chijing Investment Management Co., Ltd. ("Shanghai Chijing") for unpaid rent of RMB0.27 million ($0.04 million) per month in the Shanghai People's Court for Jiading District (the "District Court"). The rent arrears began accumulating from April 2018 to the actual payment date. In July 2019, Shanghai Chijing filed counterclaims against LA GO GO to claim RMB10.19 million ($1.45 million) in damages, alleging that LA GO GO had not fulfilled its corresponding obligations as a landlord. As a result, the District Court froze the bank accounts of both Shanghai Chijing and LA GO GO. As of December 31, 2019, a total balance of RMB15.38 million ($2.2 million) was frozen in the bank accounts of LA GO GO. As of December 31, 2019, the Company had booked this restricted cash in other receivables. On March 10, 2020, the District Court entered a judgment in favor of LA GO GO and dismissed most of Shanghai Chijing's counterclaims. The District Court ordered Shanghai Chijing to pay to LA GO GO an aggregate sum of RMB4.77 million ($0.68 million), which is the accumulated unpaid rent from April 2018 to January 2020. The District Court also ordered LA GO GO to pay Shanghai Chijing RMB1.49 ($0.21 million) for the expenses incurred from remodeling. Both parties were required to pay the monetary damages within ten days after the District Court's decision. LA GO GO appealed to the Shanghai Second Appellate Court (the "Appellate Court") to claim more damages, while Shanghai Chijing appealed to reverse the judgment. LA GO GO later requested to withdraw its appeal, which was granted by the Appellate Court. In June 2020, the Appellate Court entered a final decision to dismiss the appeal of Shanghai Chijing and sustained the District Court's judgment. LA GO GO has not received RMB4.77 million ($0.68 million) in monetary damages from Shanghai Chijing as of June 30, 2020, and has applied for compulsory enforcement with the District Court. The total balance of RMB15.38 million ($2.2 million) in LA GO GO's bank accounts were unfrozen after the final decision in July. In addition to the foregoing, the Company may become subject to other legal proceedings that arise in the ordinary course of business and have not been finally adjudicated. Adverse decisions in any of the foregoing may have a material adverse effect on our results of operations, cash flows or our financial condition. |
Risks and Uncertainties
Risks and Uncertainties | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
RISKS AND UNCERTAINTIES | NOTE 9 RISKS AND UNCERTAINTIES Economic and Political Risks The Company's results of operations could be adversely affected by general conditions in the global economy, including conditions that are outside of its control, such as the impact of health and safety concerns from the outbreak of COVID-19. The outbreak in China has resulted in the reduction of customer traffic and temporary closures of shopping malls as mandated by the provincial governments in various provinces of China from late January to March, which has adversely affected the company is the retail business with a decline in sales since February 2020. The Company's wholesale business is also significantly affected as the Company is facing a sharp decline in its order quantities. Some of the Company's wholesale clients have also cancelled or postponed existing orders. Due to the Chinese factories' shutdowns and traffic restrictions during the outbreak in China and potential shutdowns and traffic restrictions in the countries where the Company's suppliers are located, The Company's supply chain and business operations of its suppliers may be affected. Disruptions from the closure of supplier and manufacturer facilities, interruptions in the supply of raw materials and components, personnel absences, or restrictions on the shipment of the Company's or its suppliers' or customers' products, could have adverse ripple effects on the Company's manufacturing output and delivery schedule. The Company could also face difficulties in collecting its accounts receivables due to the effects of COVID-19 on its customers and risk gaining a large amount of bad debt. Global health concerns, such as COVID-19, could also result in social, economic, and labor instability in the countries and localities in which the Company, its suppliers and customers operate. Although China has already begun to recover from the outbreak of COVID-19, the epidemic continues to spread on a global scale and there is the risk of the epidemic returning to China in the future, thereby causing further business interruption. While the potential economic impact brought by and the duration of COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect the Company's liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect the Company's business and the value of its common stock. If the Company's future sales continue to decline significantly, it may risk facing financial difficulties due to its recurring fixed expenses. The extent to which COVID-19 impacts the Company's operating is uncertain and cannot be predicted at this time, and it will depend on many factors and future developments, including new information about COVID-19 and any new government regulations which may emerge to contain the virus, among others. 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. Credit risk 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. 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. Concentration risk For the six months ended June 30, 2020, the Company had two wholesale customers that represented approximately 19% and 12% of the Company's revenues. For the three months ended June 30, 2020, the Company had one wholesale customer that represented approximately 30% of the Company's revenues. For the six months ended June 30, 2019, the Company had two wholesale customers that represented approximately 16% and 10% of the Company's revenues. For the three months ended June 30, 2019, the Company had two wholesale customers that represented approximately 8% and 14% of the Company's revenues. For the wholesale business, the Company did not rely on any raw material supplier that represented more than 10% of the total raw material purchases during the three and six months ended June 30, 2020 and 2019. For the Company's retail business, the Company had three suppliers that represented 41%, 24% and 19% of raw materials purchases during the six months ended June 30, 2020. For the retail business, the Company relied on three raw material suppliers that represented approximately 32%, 31% and 21% of raw material purchases during the six months ended June 30, 2019. For the wholesale business, the Company relied on two finished goods suppliers that represented approximately 20% and 11% of the total raw material purchases during the six months ended June 30, 2020. For the wholesale business, the Company did not rely on any finished goods supplier that represented more than 10% of the total raw material purchases during the three and six months ended June 30, 2019. For the retail business, the Company did not rely on any supplier that represented more than 10% of the total finished goods purchases during the six months ended June 30, 2020 and 2019. The Company's revenues for the three and six months ended June 30, 2020 and 2019 were earned in the following geographic areas: Three months ended Six months ended 2020 2019 2020 2019 (In thousands of U.S. Dollars) The People's Republic of China $ 3,111 $ 6,491 $ 7,764 $ 17,246 Hong Kong China 2,054 6,463 5,045 7,717 Germany 48 877 243 1,726 United Kingdom 471 2,038 1,309 2,838 Europe-Other 3,612 4,224 7,511 9,453 Japan 2,205 1,311 6,589 6,248 United States 10,548 15,847 15,876 20,125 Total wholesale business 22,049 37,251 44,337 65,353 Retail business 28,037 40,065 64,104 99,919 Total $ 50,086 $ 77,316 $ 108,441 $ 165,272 |
Segments
Segments | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
SEGMENTS | NOTE 10 SEGMENTS The Company reports financial and operating information in the following two segments: (a) Wholesale segment (b) Retail segment Wholesale Retail Total (In thousands of U.S. Dollars) Six months ended June 30, 2020 Segment profit or loss: Net revenue from external customers $ 44,337 64,104 108,441 Income (loss) from operations $ 1,001 (8,378 ) (7,377 ) Interest income $ 576 40 616 Interest expense $ 719 188 907 Depreciation and amortization $ 583 3,014 3,597 Income tax expense $ 468 25 493 Segment assets: Additions to property, plant and equipment 185 833 1,018 Total assets 96,192 156,096 252,288 Six months ended June 30, 2019 Segment profit or loss: Net revenue from external customers $ 65,353 99,919 165,272 Income from operations $ 2,374 397 2,771 Interest income $ 466 18 484 Interest expense $ 572 199 771 Depreciation and amortization $ 473 8,740 9,213 Income tax expense $ 1,475 805 2,280 Segment assets: Additions to property, plant and equipment 549 3,533 4,082 Total assets 77,218 188,541 265,759 Wholesale Retail Total (In thousands of U.S. Dollars) Three months ended June 30, 2020 Segment profit or loss: Net revenue from external customers $ 22,049 28,037 50,086 Income (loss) from operations $ 1,675 (5,827 ) (4,152 ) Interest income $ 314 25 339 Interest expense $ 501 65 566 Depreciation and amortization $ 329 1,681 2,010 Income tax expense $ 282 (16 ) 266 Three months ended June 30, 2019 Segment profit or loss: Net revenue from external customers $ 37,251 40,065 77,316 Income from operations $ 1,605 345 1,950 Interest income $ 268 9 277 Interest expense $ 310 98 408 Depreciation and amortization $ 182 2,084 2,266 Income tax expense $ 1,255 200 1,455 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 11 SUBSEQUENT EVENTS As of August 14, 2020, there is no material subsequent event to be disclosed. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
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. As of June 30, 2020 and 2019, the Company's financial assets (all Level 1) consist of cash placed with financial institutions and trading securities 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. The Company has adopted ASC 825-10 " Financial Instruments As of June 30, 2020, the Company's financial assets (all Level 1) consist of cash placed with financial institutions and trading securities (nil at December 31, 2019) with brokerage accounts that management considers to be high quality. |
Foreign Currency Translation and Other Comprehensive Income | Foreign Currency Translation and Other Comprehensive Income The reporting currency of the Company is the U.S. dollar. The functional currency of Ever-Glory, Perfect Dream, Ever-Glory HK and Ever-Glory Supply Chain is the U.S. dollar. The functional currency of Goldenway, New Tailun, Catch-luck, Ever-Glory Apparel, Shanghai LA GO GO, Jiangsu LA GO GO, Tianjin LA GO GO, Shanghai Yiduo, Ya Lan, He Meida, Huirui, Taixin, Haian Taixin and Nanjing Rui Lian is the Chinese RMB . For subsidiaries whose functional currency is the RMB, all assets and liabilities were translated at the exchange rate at the balance sheet date; equity was translated at historical rates and items in the statement of comprehensive income were translated at the average rate for the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income. The resulting translation gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Items in the cash flow statement are translated at the average exchange rate for the period. |
Use of Estimates | Use of Estimates In preparing our condensed consolidated financial statements, we use estimates and assumptions that affect the reported amounts and disclosures. Our estimates are often based on complex judgments, probabilities and assumptions that we believe to be reasonable, but that are inherently uncertain and unpredictable. We are also subject to other risks and uncertainties that may cause actual results to differ from estimated amounts. Significant estimates include the assumptions used to value tax liabilities, derivative financial instruments, the estimates of the allowance for deferred tax assets, and the accounts receivable allowance, and impairment of long-lived assets and inventory write off. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" 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. |
Reclassification | Reclassification Certain amounts in the prior period presented have been reclassified to conform to the current year presentation. There was no impact on previously reported assets, net income or total cash flows. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | June 30, December 31, (In thousands of Raw materials $ 1,451 $ 1,468 Work-in-progress 9,954 8,025 Finished goods 39,849 57,862 Total inventories $ 51,254 $ 67,355 |
Bank Loans (Tables)
Bank Loans (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of short-term bank loans | June 30, December 31, Bank (In thousands of Industrial and Commercial Bank of China $ 19,782 $ 18,629 Shanghai Pudong Development Bank 15,543 - China Minsheng Bank 2,826 2,866 Bank of China 2,120 - Nanjing Bank - 6,449 Bank of Communications - 1,426 HSBC - 561 $ 40,271 $ 29,931 |
Income Tax (Tables)
Income Tax (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Summary of pre-tax income in jurisdictions | Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 (In thousands of U.S. Dollars) PRC $ (3,531 ) $ 3,228 $ (6,000 ) $ 3,605 Others (3 ) - (5 ) (7 ) $ (3,534 ) $ 3,228 $ (6,005 ) $ 3,598 |
Summary of reconciliation of PRC statutory rates to the Company's effective tax rate | Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 PRC statutory rate 25.0 % 25.0 % 25.0 % 25.0 % Temporary difference between US GAAP and PRC tax accounting (32.5 ) 20.1 (33.2 ) 38.4 Effective income tax rate (7.5 )% 45.1 % (8.2 )% 63.4 % |
Schedule of income tax expense | Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 Current $ 195 $ 1,785 $ 304 $ 1,990 Deferred 71 (330 ) 189 290 Income tax expense $ 266 $ 1,455 $ 493 $ 2,280 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Summary of other expenses due to related parties | Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 (In thousands of U.S. Dollars) Chuzhou Huarui 52 35 102 88 Kunshan Enjin 21 22 43 44 Total $ 73 $ 57 $ 145 $ 132 |
Summary of sub-contracts with related parties | Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands of U.S. Dollars) Chuzhou Huarui $ 477 $ 1,960 $ 990 $ 3,467 Fengyang Huarui 242 442 400 548 Nanjing Ever-Kyowa 188 408 442 755 Ever-Glory Vietnam 3,595 2,469 5,479 5,048 Nanjing Knitting 487 600 487 600 EsCeLav 14 13 24 101 Jiangsu Ever-Glory 381 45 627 470 $ 5,384 $ 5,937 $ 8,449 $ 10,989 |
Summary of accounts payable to related parties | 2020 2019 (In thousands of Ever-Glory Vietnam $ 1,993 2,260 Fengyang Huarui 140 414 Nanjing Ever-Kyowa 317 386 Chuzhou Huarui 1,341 1,064 Nanjing Knitting 254 186 Jiangsu Ever-Glory 5 501 Total $ 4,050 $ 4,811 |
Summary of amounts due from related party current assets | 2020 2019 (In thousands of Jiangsu Ever-Glory 329 123 Total $ 329 $ 123 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | Year ending December 31, (In thousands of U.S. Dollars) 2020 387 2021 387 2022 387 2023 401 2024 401 Thereafter 12,374 $ 14,337 |
Risks and Uncertainties (Tables
Risks and Uncertainties (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Schedule of Company's revenues as per geographic areas | Three months ended Six months ended 2020 2019 2020 2019 (In thousands of U.S. Dollars) The People's Republic of China $ 3,111 $ 6,491 $ 7,764 $ 17,246 Hong Kong China 2,054 6,463 5,045 7,717 Germany 48 877 243 1,726 United Kingdom 471 2,038 1,309 2,838 Europe-Other 3,612 4,224 7,511 9,453 Japan 2,205 1,311 6,589 6,248 United States 10,548 15,847 15,876 20,125 Total wholesale business 22,049 37,251 44,337 65,353 Retail business 28,037 40,065 64,104 99,919 Total $ 50,086 $ 77,316 $ 108,441 $ 165,272 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
Summary of financial and operating information | Wholesale Retail Total (In thousands of U.S. Dollars) Six months ended June 30, 2020 Segment profit or loss: Net revenue from external customers $ 44,337 64,104 108,441 Income (loss) from operations $ 1,001 (8,378 ) (7,377 ) Interest income $ 576 40 616 Interest expense $ 719 188 907 Depreciation and amortization $ 583 3,014 3,597 Income tax expense $ 468 25 493 Segment assets: Additions to property, plant and equipment 185 833 1,018 Total assets 96,192 156,096 252,288 Six months ended June 30, 2019 Segment profit or loss: Net revenue from external customers $ 65,353 99,919 165,272 Income from operations $ 2,374 397 2,771 Interest income $ 466 18 484 Interest expense $ 572 199 771 Depreciation and amortization $ 473 8,740 9,213 Income tax expense $ 1,475 805 2,280 Segment assets: Additions to property, plant and equipment 549 3,533 4,082 Total assets 77,218 188,541 265,759 Wholesale Retail Total (In thousands of U.S. Dollars) Three months ended June 30, 2020 Segment profit or loss: Net revenue from external customers $ 22,049 28,037 50,086 Income (loss) from operations $ 1,675 (5,827 ) (4,152 ) Interest income $ 314 25 339 Interest expense $ 501 65 566 Depreciation and amortization $ 329 1,681 2,010 Income tax expense $ 282 (16 ) 266 Three months ended June 30, 2019 Segment profit or loss: Net revenue from external customers $ 37,251 40,065 77,316 Income from operations $ 1,605 345 1,950 Interest income $ 268 9 277 Interest expense $ 310 98 408 Depreciation and amortization $ 182 2,084 2,266 Income tax expense $ 1,255 200 1,455 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of inventories | ||
Raw materials | $ 1,451 | $ 1,468 |
Work-in-progress | 9,954 | 8,025 |
Finished goods | 39,849 | 57,862 |
Total inventories | $ 51,254 | $ 67,355 |
Bank Loans (Details)
Bank Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of short term bank loans | ||
Bank loans | $ 40,271 | $ 29,931 |
Industrial and Commercial Bank of China [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 19,782 | 18,629 |
Shanghai Pudong Development Bank [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 15,543 | |
China Minsheng Bank [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 2,826 | 2,866 |
Bank of China [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 2,120 | |
Nanjing Bank [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 6,449 | |
Bank of Communications [Member] | ||
Schedule of short term bank loans | ||
Bank loans | 1,426 | |
HSBC [Member] | ||
Schedule of short term bank loans | ||
Bank loans | $ 561 |
Bank Loans (Details Textual)
Bank Loans (Details Textual) - USD ($) $ in Thousands | Aug. 30, 2019 | Apr. 30, 2020 | Oct. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Aug. 31, 2018 | Jun. 30, 2018 |
Bank Loans (Textual) | |||||||||||
Line of credit extended maturity date, description | Ever-Glory Apparel and Goldenway collectively entered into a secured banking facility agreement for a combined revolving import facility, letter of credit, invoice financing facilities and a credit line for treasury products of up to $2.5 million with the Nanjing Branch of HSBC (China) Company Limited (“HSBC”). This agreement is guaranteed by the Company and Mr. Kang. As of June 30, 2020, approximately $2.5 million was unused and available under this line of credit. | Ever-Glory Apparel entered into a line of credit agreement for approximately $4.2 million (RMB30.0 million) with Bank of China and guaranteed by Jiangsu Ever-Glory. These loans are also collateralized by assets of Jiangsu Ever-Glory’s equity investee, Chuzhou Huarui, under a collateral agreement executed by Ever-Glory Apparel, Chuzhou Huarui and Bank of China. As of June 30, 2020, Ever-Glory Apparel had borrowed $2.1 million (RMB 15.0 million) under this line of credit with an annual interest rate of 4.57% and due on September 2020. As of June 30, 2020, approximately $2.1 million was unused and available under this line of credit. | LA GO GO entered into a line of credit agreement for approximately $2.8 million (RMB20.0 million) with China Minsheng Bank and guaranteed by Ever-Glory Apparel and Mr. Kang. As of June 30, 2020, LA GO GO had borrowed $2.8 million (RMB20.0 million) from China Minsheng Bank with an annual interest rate of 5.0% and due in November 2020. | Ever-Glory Apparel entered into a line of credit agreement for approximately $5.7 million (RMB40.0 million) with the Shanghai Pudong Development Bank and guaranteed by Goldenway. As of June 30, 2020, approximately $5.7 million was unused and available under this line of credit. In March 2020, Ever-Glory Apparel entered into a certificate of three-year time deposit of $15.5 million (RMB110.0 million) with the Shanghai Pudong Development Bank with annual interest rates ranging from 3.85% to 3.99%. In April 2020, Ever-Glory Apparel pledged the certificate of three-year time deposit to the Shanghai Pudong Development Bank and Ever-Glory Apparel had borrowed $15.5 million (RMB 110.0 million) under this line of certificate with an annual interest rate of 2.02% and due on July 2020. On July 2020, Ever-Glory Apparel repaid the loan and borrowed $11.3 million (RMB 80.0 million) under this line of certificate with an annual interest rate of 2.50% and due on July 2021. | |||||||
Industrial and Commercial Bank Of China [Member] | Goldenway [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Line of credit extended maturity date | Aug. 31, 2020 | ||||||||||
Line of credit annual interest rates | 4.57% | ||||||||||
Borrowed loans from related party | $ 5,700 | ||||||||||
Industrial and Commercial Bank Of China [Member] | Goldenway [Member] | CNY [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Borrowed loans from related party | $ 40,000 | ||||||||||
Industrial and Commercial Bank Of China [Member] | Ever Glory Apparel [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Line of credit agreement amount | $ 14,100 | $ 14,100 | $ 8,500 | ||||||||
Industrial and Commercial Bank Of China [Member] | Ever Glory Apparel [Member] | Minimum [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Line of credit annual interest rates | 3.92% | ||||||||||
Industrial and Commercial Bank Of China [Member] | Ever Glory Apparel [Member] | Maximum [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Line of credit annual interest rates | 4.70% | ||||||||||
Industrial and Commercial Bank Of China [Member] | Ever Glory Apparel [Member] | CNY [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Line of credit agreement amount | 100,000 | $ 100,000 | 60,000 | ||||||||
Goldenway [Member] | Nanjing Bank [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Line of credit agreement amount | 7,100 | ||||||||||
Unused line of credit | 7,100 | 7,100 | |||||||||
Goldenway [Member] | Nanjing Bank [Member] | CNY [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Line of credit agreement amount | $ 50,000 | ||||||||||
Goldenway [Member] | Shanghai Pudong Development Bank [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Line of credit agreement amount | $ 5,700 | ||||||||||
Mr. Kang and Goldenway [Member] | JiangsuEverGlory[Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Unused line of credit | 8,500 | $ 8,500 | |||||||||
Nanjing Bank [Member] | LA GO GO [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Line of credit agreement amount | 2,800 | $ 2,800 | $ 2,800 | ||||||||
Unused line of credit | 2,800 | ||||||||||
Nanjing Bank [Member] | LA GO GO [Member] | CNY [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Line of credit agreement amount | 20,000 | 20,000 | 20,000 | ||||||||
China Minsheng Banking [Member] | LA GO GO [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Line of credit agreement amount | $ 2,800 | ||||||||||
China Everbright Bank [Member] | Shanghai Pudong Development Bank [Member] | CNY [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Line of credit agreement amount | $ 4,000 | ||||||||||
Bank Of Communications [Member] | Nanjing Bank [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Due date of revolving line of credit agreement | September 2020 to May 2021 | ||||||||||
Shanghai Pudong Development Bank [Member] | Shanghai Chijing [Member] | |||||||||||
Bank Loans (Textual) | |||||||||||
Interest expense on bank loans | $ 600 | $ 400 | $ 900 | $ 800 |
Income Tax (Details)
Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Summary of Pre-tax income in jurisdictions | ||||
Pre-tax income | $ (3,534) | $ 3,228 | $ (6,005) | $ 3,598 |
PRC [Member] | ||||
Summary of Pre-tax income in jurisdictions | ||||
Pre-tax income | (3,531) | 3,228 | (6,000) | 3,605 |
Others [Member] | ||||
Summary of Pre-tax income in jurisdictions | ||||
Pre-tax income | $ (3) | $ (5) | $ (7) |
Income Tax (Details 1)
Income Tax (Details 1) - PRC [Member] | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Summary of reconciliation of PRC statutory rates to the company's effective tax rate | ||||
PRC statutory rate | 25.00% | 25.00% | 25.00% | 25.00% |
Temporary difference between US GAAP and PRC tax accounting | (32.50%) | 20.10% | (33.20%) | 38.40% |
Effective income tax rate | (7.50%) | 45.10% | (8.20%) | 63.40% |
Income Tax (Details 2)
Income Tax (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Summary of income tax expense | ||||
Current | $ 195 | $ 1,785 | $ 304 | $ 1,990 |
Deferred | 71 | (330) | 71 | (1,461) |
Income tax expense | $ 266 | $ 1,455 | $ 493 | $ 2,280 |
Income Tax (Details Textual)
Income Tax (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax (Textual) | ||||
Income tax, description | One significant change was to decrease the general corporate income tax rate from 34% to 21%. This reduction had no effect on the Company's income tax expense as the reduction in deferred tax assets was offset by an equivalent reduction in the valuation allowance. Another significant change resulting from U.S. Tax Reform is that any future remittances to the parent company from business income earned by its subsidiaries outside of the U.S. will no longer to taxable to the Company under U.S. tax law. The Company would be liable for payment of income tax, or reduction of the net operating loss carryover, at a reduced rate for any accumulated earnings and profits of its non-U.S. subsidiaries at December 31, 2017. | |||
PRC [Member] | ||||
Income Tax (Textual) | ||||
PRC statutory rate | 25.00% | 25.00% | 25.00% | 25.00% |
Income tax rate for dividends distribution | 10.00% | |||
Hong Kong China [Member] | ||||
Income Tax (Textual) | ||||
PRC statutory rate | 16.50% | |||
Income tax, description | Its income tax rate is 8.25% when its profit is under HKD 2.0 million and its income tax rate is 16.5% when its profit is over HKD 2.0 million. | |||
Maximum [Member] | ||||
Income Tax (Textual) | ||||
Effective income tax reduction, percent | 15.00% | |||
Minimum [Member] | ||||
Income Tax (Textual) | ||||
Effective income tax reduction, percent | 9.00% | |||
Xizang (Tibet) [Member] | ||||
Income Tax (Textual) | ||||
PRC statutory rate | 15.00% | |||
Non-U.S. subsidiaries [Member] | ||||
Income Tax (Textual) | ||||
U.S. deferred income taxes | $ 99,900 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Two Independent Directors [Member] | Jan. 15, 2020Directors$ / sharesshares | Jan. 31, 2019Directors$ / sharesshares |
Stockholders' Equity (Textual) | ||
Common stock shares issued to independent directors | shares | 3,062 | 1,942 |
Average market price of the common stock for the five days before the grant date | $ / shares | $ 1.41 | $ 3.80 |
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. |
Number of directors | Directors | 2 | 2 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Summary of other expenses due to related parties | ||||
Total | $ 73 | $ 57 | $ 145 | $ 132 |
Chuzhou Huarui [Member] | ||||
Summary of other expenses due to related parties | ||||
Total | 52 | 35 | 102 | 88 |
Kunshan Enjin [Member] | ||||
Summary of other expenses due to related parties | ||||
Total | $ 21 | $ 22 | $ 43 | $ 44 |
Related Party Transactions (D_2
Related Party Transactions (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Sub-contracts with related parties | ||||
Total | $ 5,384 | $ 5,937 | $ 8,449 | $ 10,989 |
Chuzhou Huarui [Member] | ||||
Sub-contracts with related parties | ||||
Total | 477 | 1,960 | 990 | 3,467 |
Fengyang Huarui [Member] | ||||
Sub-contracts with related parties | ||||
Total | 242 | 442 | 400 | 548 |
Nanjing Ever-Kyowa [Member] | ||||
Sub-contracts with related parties | ||||
Total | 188 | 408 | 442 | 755 |
Ever-Glory Vietnam [Member] | ||||
Sub-contracts with related parties | ||||
Total | 3,595 | 2,469 | 5,479 | 5,048 |
Nanjing Knitting [Member] | ||||
Sub-contracts with related parties | ||||
Total | 487 | 600 | 487 | 600 |
EsC'eLav [Member] | ||||
Sub-contracts with related parties | ||||
Total | 14 | 13 | 24 | 101 |
Jiangsu Ever-Glory [Member] | ||||
Sub-contracts with related parties | ||||
Total | $ 381 | $ 45 | $ 627 | $ 470 |
Related Party Transactions (D_3
Related Party Transactions (Details 2) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Summary of accounts payable - related parties | ||
Total | $ 4,050 | $ 4,811 |
Ever-Glory Vietnam [Member] | ||
Summary of accounts payable - related parties | ||
Total | 1,993 | 2,260 |
Fengyang Huarui [Member] | ||
Summary of accounts payable - related parties | ||
Total | 140 | 414 |
Nanjing Ever-Kyowa [Member] | ||
Summary of accounts payable - related parties | ||
Total | 317 | 386 |
Chuzhou Huarui [Member] | ||
Summary of accounts payable - related parties | ||
Total | 1,341 | 1,064 |
Nanjing Knitting [Member] | ||
Summary of accounts payable - related parties | ||
Total | 254 | 186 |
Jiangsu Ever-Glory [Member] | ||
Summary of accounts payable - related parties | ||
Total | $ 5 | $ 501 |
Related Party Transactions (D_4
Related Party Transactions (Details 3) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Summary of amounts due from related parties | ||
Total | $ 329 | $ 123 |
Jiangsu Ever-Glory [Member] | ||
Summary of amounts due from related parties | ||
Total | $ 329 | $ 123 |
Related Party Transactions (D_5
Related Party Transactions (Details Textual) ¥ in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2020CNY (¥) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | |
Related Party Transactions (Textual) | |||||||||
Net (loss) income | $ (3,800) | $ (2,698) | $ 1,773 | $ (455) | $ (6,498) | $ 1,318 | |||
Amount due from related party | 3,996 | $ 3,996 | $ 4,932 | ||||||
Amounts due from related party under counter guarantee agreement, description | The amount of the counter-guarantee was $3.7 million (RMB 26.4 million) (the difference represents currency exchange adjustment of $0.1 million), which was 10.2% of the aggregate amount of lines of credit. Obtaining bank loan requires a higher guarantee deposit in this quarter. This amount plus accrued interest of $0.3 million have been classified as a reduction of equity, consistent with the guidance of SEC Staff Accounting Bulletins 4E and 4G. At June 30, 2020 and December 31, 2019, the amount classified as a reduction of equity was $4.0 million and $5.0 million, respectively. Interest of 0.5% is charged on net amounts due from Jiangsu Ever-Glory at each month end. Since January 1, 2019, interest rate has changed to 0.3625% as the bank benchmark interest rate decreased. Interest income for the three and six months ended June 30, 2020 and 2019 was approximately $0.01 million, $0.03 million, $0.1 million and $0.2 million, respectively. | The amount of the counter-guarantee was $3.7 million (RMB 26.4 million) (the difference represents currency exchange adjustment of $0.1 million), which was 10.2% of the aggregate amount of lines of credit. Obtaining bank loan requires a higher guarantee deposit in this quarter. This amount plus accrued interest of $0.3 million have been classified as a reduction of equity, consistent with the guidance of SEC Staff Accounting Bulletins 4E and 4G. At June 30, 2020 and December 31, 2019, the amount classified as a reduction of equity was $4.0 million and $5.0 million, respectively. Interest of 0.5% is charged on net amounts due from Jiangsu Ever-Glory at each month end. Since January 1, 2019, interest rate has changed to 0.3625% as the bank benchmark interest rate decreased. Interest income for the three and six months ended June 30, 2020 and 2019 was approximately $0.01 million, $0.03 million, $0.1 million and $0.2 million, respectively. | |||||||
JiangsuWubijia Trading Company Limited [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Company received amount from related party | 5,504 | 8,021 | $ 14,176 | 45,655 | |||||
Amount paid through the consignment | 5,504 | 8,021 | 13,248 | 39,086 | |||||
Net (loss) income | 0 | 0 | $ 928 | 6,570 | |||||
Mr. Kang [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Amounts due from related party under counter guarantee agreement, description | The Company agreed to provide Jiangsu Ever-Glory a counter guarantee in the form of cash of not less than 70% of the maximum aggregate lines of credit obtained by the Company. Jiangsu Ever-Glory is obligated to return the full amount of the counter-guarantee funds provided upon expiration or termination of the underlying lines of credit and is to pay annual interest at the rate of 6.0% of amounts provided. As of June 30, 2020 and December 31, 2019, Jiangsu Ever-Glory has provided guarantees for approximately $37.3 million (RMB 260 million) and $33.0 million (RMB 230 million) of lines of credit obtained by the Company, respectively. Jiangsu Ever-Glory and Nanjing Knitting have also provided their assets as collateral for certain of these lines of credit. The value of the collateral, as per appraisals obtained by the banks in connection with these lines of credit is approximately $29.2 million (RMB 205.5 million) and $29.4 million (RMB 205.5 million) as of June 30, 2020 and December 31, 2019, respectively. Mr. Kang has also provided a personal guarantee for $14.3 million (RMB 100.0 million) and $14.5 million (RMB 100.0 million) as of June 30, 2020 and December 31, 2019, respectively. | The Company agreed to provide Jiangsu Ever-Glory a counter guarantee in the form of cash of not less than 70% of the maximum aggregate lines of credit obtained by the Company. Jiangsu Ever-Glory is obligated to return the full amount of the counter-guarantee funds provided upon expiration or termination of the underlying lines of credit and is to pay annual interest at the rate of 6.0% of amounts provided. As of June 30, 2020 and December 31, 2019, Jiangsu Ever-Glory has provided guarantees for approximately $37.3 million (RMB 260 million) and $33.0 million (RMB 230 million) of lines of credit obtained by the Company, respectively. Jiangsu Ever-Glory and Nanjing Knitting have also provided their assets as collateral for certain of these lines of credit. The value of the collateral, as per appraisals obtained by the banks in connection with these lines of credit is approximately $29.2 million (RMB 205.5 million) and $29.4 million (RMB 205.5 million) as of June 30, 2020 and December 31, 2019, respectively. Mr. Kang has also provided a personal guarantee for $14.3 million (RMB 100.0 million) and $14.5 million (RMB 100.0 million) as of June 30, 2020 and December 31, 2019, respectively. | |||||||
Jiangsu Ever Glory [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Purchase of raw material | 400 | 600 | $ 0 | 0 | |||||
Amount due from related party | $ 4,700 | ||||||||
Repayment received under counter guarantee | 3,100 | ||||||||
Jiangsu Ever Glory [Member] | CNY [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Amount due from related party | ¥ | ¥ 32,800 | ||||||||
Repayment received under counter guarantee | ¥ | ¥ 22,000 | ||||||||
Nanjing Knitting [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Purchase of raw material | 0 | 0 | 400 | 600 | |||||
Jiangsu Ever Glory [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Purchase of raw material | $ 400 | $ 1,100 | 100 | $ 100 | |||||
Jiangsu Ever Glory [Member] | CNY [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Repayment received under counter guarantee | $ 4,000 | ||||||||
Jiangsu Ever Glory [Member] | |||||||||
Related Party Transactions (Textual) | |||||||||
Repayment received under counter guarantee | ¥ | ¥ 28,300 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Summary of future minimum lease payments | |
2020 | $ 387 |
2021 | 387 |
2022 | 387 |
2023 | 401 |
2024 | 401 |
Thereafter | 12,374 |
Total | $ 14,337 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Textual) $ / shares in Units, ¥ in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2019USD ($) | Jun. 30, 2020USD ($)$ / shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)$ / shares | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Jul. 31, 2019USD ($) | Mar. 31, 2019CNY (¥) | |
Commitments and Contingencies (Textual) | |||||||||
Commitment and contingencies, description | Shanghai La Go Go Fashion Company Limited ("LA GO GO") filed a complaint against Shanghai Chijing Investment Management Co., Ltd. ("Shanghai Chijing") for unpaid rent of RMB0.27 million ($0.04 million) per month in the Shanghai People's Court for Jiading District (the "District Court"). The rent arrears began accumulating from April 2018 to the actual payment date. In July 2019, Shanghai Chijing filed counterclaims against LA GO GO to claim RMB10.19 million ($1.45 million) in damages, alleging that LA GO GO had not fulfilled its corresponding obligations as a landlord. As a result, the District Court froze the bank accounts of both Shanghai Chijing and LA GO GO. As of December 31, 2019, a total balance of RMB15.38 million ($2.2 million) was frozen in the bank accounts of LA GO GO. As of December 31, 2019, the Company had booked this restricted cash in other receivables. On March 10, 2020, the District Court entered a judgment in favor of LA GO GO and dismissed most of Shanghai Chijing's counterclaims. The District Court ordered Shanghai Chijing to pay to LA GO GO an aggregate sum of RMB4.77 million ($0.68 million), which is the accumulated unpaid rent from April 2018 to January 2020. The District Court also ordered LA GO GO to pay Shanghai Chijing RMB1.49 ($0.21 million) for the expenses incurred from remodeling. Both parties were required to pay the monetary damages within ten days after the District Court's decision. LA GO GO appealed to the Shanghai Second Appellate Court (the "Appellate Court") to claim more damages, while Shanghai Chijing appealed to reverse the judgment. LA GO GO later requested to withdraw its appeal, which was granted by the Appellate Court. In June 2020, the Appellate Court entered a final decision to dismiss the appeal of Shanghai Chijing and sustained the District Court's judgment. LA GO GO has not received RMB4.77 million ($0.68 million) in monetary damages from Shanghai Chijing as of June 30, 2020, and has applied for compulsory enforcement with the District Court. The total balance of RMB15.38 million ($2.2 million) in LA GO GO's bank accounts were unfrozen after the final decision in July. | ||||||||
Revenues | $ 50,086 | $ 77,316 | $ 108,441 | $ 165,272 | |||||
General administrative expenses | $ 5,971 | $ 7,337 | 11,755 | $ 14,867 | |||||
Cash paid for operating leases | $ 4,800 | ||||||||
Weighted average discount rate | $ / shares | $ 4.35 | $ 4.35 | |||||||
Weighted average remaining lease term | 31 years | 31 years | |||||||
Shanghai Chijing [Member] | |||||||||
Commitments and Contingencies (Textual) | |||||||||
Counter claim | $ 1,450 | ||||||||
Total balance | $ 2,200 | ||||||||
Shanghai Chijing [Member] | RMB [Member] | |||||||||
Commitments and Contingencies (Textual) | |||||||||
Counter claim | $ 10,190 | ||||||||
Total balance | ¥ | ¥ 15,380 | ||||||||
LA GO GO [Member] | |||||||||
Commitments and Contingencies (Textual) | |||||||||
Unpaid rent | $ 680 | ||||||||
LA GO GO [Member] | RMB [Member] | |||||||||
Commitments and Contingencies (Textual) | |||||||||
Unpaid rent | ¥ | ¥ 4,770 | ||||||||
Operating Lease Commitment [Member] | |||||||||
Commitments and Contingencies (Textual) | |||||||||
Revenues | $ 4,600 | ||||||||
General administrative expenses | $ 200 |
Risks and Uncertainties (Detail
Risks and Uncertainties (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues earned in geographic areas | ||||
Revenues | $ 50,086 | $ 77,316 | $ 108,441 | $ 165,272 |
Wholesale Business [Member] | ||||
Revenues earned in geographic areas | ||||
Revenues | 22,049 | 37,251 | 44,337 | 65,353 |
Retail Business [Member] | ||||
Revenues earned in geographic areas | ||||
Revenues | 28,037 | 40,065 | 64,104 | 99,919 |
The People's Republic of China [Member] | ||||
Revenues earned in geographic areas | ||||
Revenues | 3,111 | 6,491 | 7,764 | 17,246 |
Hong Kong China [Member] | ||||
Revenues earned in geographic areas | ||||
Revenues | 2,054 | 6,463 | 5,045 | 7,717 |
Germany [Member] | ||||
Revenues earned in geographic areas | ||||
Revenues | 48 | 877 | 243 | 1,726 |
United Kingdom [Member] | ||||
Revenues earned in geographic areas | ||||
Revenues | 471 | 2,038 | 1,309 | 2,838 |
Europe-Other [Member] | ||||
Revenues earned in geographic areas | ||||
Revenues | 3,612 | 4,224 | 7,511 | 9,453 |
Japan [Member] | ||||
Revenues earned in geographic areas | ||||
Revenues | 2,205 | 1,311 | 6,589 | 6,248 |
United States [Member] | ||||
Revenues earned in geographic areas | ||||
Revenues | $ 10,548 | $ 15,847 | $ 15,876 | $ 20,125 |
Risks and Uncertainties (Deta_2
Risks and Uncertainties (Details Textual) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020customersupplier | Jun. 30, 2019customersupplier | |
Risks and Uncertainties (Textual) | ||||
Number of customer | customer | 2 | 2 | ||
Number of suppliers | supplier | 3 | 3 | ||
Wholesale Business [Member] | ||||
Risks and Uncertainties (Textual) | ||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% |
Supplier one [Member] | ||||
Risks and Uncertainties (Textual) | ||||
Concentration risk, percentage | 41.00% | 32.00% | ||
Supplier two [Member] | ||||
Risks and Uncertainties (Textual) | ||||
Concentration risk, percentage | 24.00% | 31.00% | ||
Supplier three [Member] | ||||
Risks and Uncertainties (Textual) | ||||
Concentration risk, percentage | 19.00% | 21.00% | ||
Supplier [Member] | Retail Business [Member] | ||||
Risks and Uncertainties (Textual) | ||||
Concentration risk, percentage | 10.00% | 10.00% | ||
Sales Revenue, Net [Member] | Customer One [Member] | ||||
Risks and Uncertainties (Textual) | ||||
Concentration risk, percentage | 30.00% | 8.00% | 19.00% | 16.00% |
Sales Revenue, Net [Member] | Customer Two [Member] | ||||
Risks and Uncertainties (Textual) | ||||
Concentration risk, percentage | 14.00% | 12.00% | 10.00% | |
Sales Revenue, Net [Member] | Supplier one [Member] | Wholesale Business [Member] | ||||
Risks and Uncertainties (Textual) | ||||
Concentration risk, percentage | 20.00% | |||
Sales Revenue, Net [Member] | Supplier two [Member] | Wholesale Business [Member] | ||||
Risks and Uncertainties (Textual) | ||||
Concentration risk, percentage | 11.00% | |||
Sales Revenue, Net [Member] | Raw Material Suppliers [Member] | Wholesale Business [Member] | ||||
Risks and Uncertainties (Textual) | ||||
Concentration risk, percentage | 10.00% | 10.00% |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Segment profit or loss: | |||||
Net revenue from external customers | $ 50,086 | $ 77,316 | $ 108,441 | $ 165,272 | |
Income from operations | (4,152) | 1,950 | (7,377) | 2,771 | |
Interest income | 339 | 277 | 616 | 484 | |
Interest expense | 566 | 408 | 907 | 771 | |
Depreciation and amortization | 2,010 | 2,266 | 3,597 | 4,491 | |
Income tax expense | 266 | 1,455 | 493 | 2,280 | |
Segment assets: | |||||
Additions to property, plant and equipment | 1,018 | 4,082 | |||
Total assets | 252,288 | 265,759 | 252,288 | 265,759 | $ 301,671 |
Wholesale Segment [Member] | |||||
Segment profit or loss: | |||||
Net revenue from external customers | 22,049 | 37,251 | 44,337 | 65,353 | |
Income from operations | 1,675 | 1,605 | 1,001 | 2,374 | |
Interest income | 314 | 268 | 576 | 466 | |
Interest expense | 501 | 310 | 719 | 572 | |
Depreciation and amortization | 329 | 182 | 583 | 473 | |
Income tax expense | 282 | 1,255 | 468 | 1,475 | |
Segment assets: | |||||
Additions to property, plant and equipment | 185 | 549 | |||
Total assets | 96,192 | 77,218 | 96,192 | 77,218 | |
Retail Segment [Member] | |||||
Segment profit or loss: | |||||
Net revenue from external customers | 28,037 | 40,065 | 64,104 | 99,919 | |
Income from operations | (5,827) | 345 | (8,378) | 397 | |
Interest income | 25 | 9 | 40 | 18 | |
Interest expense | 65 | 98 | 188 | 199 | |
Depreciation and amortization | 1,681 | 2,084 | 3,014 | 8,740 | |
Income tax expense | (16) | 200 | 25 | 805 | |
Segment assets: | |||||
Additions to property, plant and equipment | 833 | 3,533 | |||
Total assets | $ 156,096 | $ 188,541 | $ 156,096 | $ 188,541 |
Segments (Details Textual)
Segments (Details Textual) | 6 Months Ended |
Jun. 30, 2020Segment | |
Segments (Textual) | |
Number of segments | 2 |