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Ever-Glory Reports Second Quarter 2007 Financial Results
9:00a ET August 15, 2007 (PR NewsWire)
Ever-Glory International Group, Inc. (OTC Bulletin Board: ("Ever-Glory," "the Company"), a leading apparel manufacturer in the People's Republic of China ("PRC"), announced its financial results for the second quarter ended June 30, 2007.

Second Quarter 2007 Highlights -- Net sales increased 3.8% year-over-year to $9.6 million -- Net income totaled $0.5 million, compared to $0.7 million a year ago -- Began shipping on new $2.8 million annual production order to Walls Industries -- Received $1.0 million in annual production orders from Levi Strauss (Hong Kong) Limited -- Filed Definitive 14C Information Statement related to acquisition of Catch-Luck Garments Limited in August 2007 -- Closed private placement financing, generating $2.0 million in gross proceeds in August 2007

Second Quarter 2007 Results

For the second quarter of 2007, net sales were $9.6 million, up 3.8% from $9.2 million in the same quarter of 2006. The increase in sales was mainly attributed to a slight increase in sales to customers in the U.S. market.

"During the second quarter, we continued to make inroads into the U.S. market, as we began shipping under our new production order with Walls Industries and increased our production for QVC," said Mr. Edward Kang, Chairman and Chief Executive Officer of Ever-Glory. "Appreciation in the RMB put some pressure on gross margin, and we were not able to pass all of this on to our customers in the form of higher prices. However, we should be able to gradually absorb this cost and achieve a higher margin later in the year."

Gross profit for the second quarter was $1.4 million, a decline of 3.3% from $1.5 million a year ago. Gross margin was 14.9% in the second quarter of 2007, compared to 15.9% in the second quarter of 2006. This decline was caused by an increase in raw materials costs because of appreciation in the Chinese RMB relative to the U.S. dollar.

Operating expenses in the second quarter were $0.8 million, an increase of 32.2% from $0.6 million in the same quarter of 2006. This increase was primarily caused by an increase of 73.1% in general and administrative expenses due to higher management salaries and other expenses related to expansion of the business. Depreciation expenses were also higher due to the company's new corporate headquarters, plant and testing facilities and the new Goldenway factory, which was completed in December 2006. Selling expenses and professional fees declined 27.6% and 19.7%, respectively, from the second quarter of 2007. Operating expenses totaled 8.6% of revenues in the second quarter of 2007, compared to 6.7% in the same period the prior year.

Operating income in the second quarter was $0.6 million, a decline of 29.2% from $0.9 million in the same quarter the prior year. Operating margin was 6.3%, compared to 9.2% a year ago.

Net income for the second quarter of 2007 was $0.5 million, or $0.005 per diluted share, a decrease of 35.3% from $0.7 million, or $0.01 per diluted share, in the same quarter of 2006.

At quarter-end, total annual production capacity increased to 5.6 million garment pieces, up from 2.85 million garment pieces at the end of 2006. This increase was related to the Company's new factory and corporate headquarters in the Nanjing Jiangning Economic and Technological Development Zone in Nanjing, higher levels of outsourced production and the acquisition of New- Tailun.

Six Month Results

Net revenues for the first six months of 2007 were $21.0 million, up 45.3% from revenues of $14.5 million during the same period a year ago. Gross profit was $3.1 million, or 14.9% of sales, up 31.4% from $2.4 million, or 16.5% of sales, in the first half of 2006. Operating income was $1.5 million, or 7.0% of sales, up 12.7% from $1.3 million, or 9.1% of sales, in the first half of 2006. Net income for the first six months of 2007 was $1.1 million, or $0.01 per diluted share, compared to net income of $1.1 million, or $0.01 per diluted share, in the same period a year ago.

Financial Condition

As of June 30, 2007, the company had $0.4 million in cash and cash equivalents and $0.1 million in working capital. At June 30, 2007, the Company had $4.4 million available under its credit facility and shareholders' equity stood of $9.2 million. During the first six months of 2007, the Company generated $4.2 million in cash from operations, compared to $0.8 million used in operating activities in the first half of 2006.

Business Outlook

For the 2007 fiscal year, the Company expects to generate revenues of $68 million to $70 million and net income of $5.8 million to $6.0 million. Full year guidance includes the consolidated financial results of the Company's Goldenway and New-Tailun subsidiaries, as well as the pending acquisition of and Catch-Luck, which is expected to close in the third quarter of 2007.

With the acquisition of Catch Luck, Ever-Glory will add annual production capacity of 800,000 garment pieces to its existing capacity. When combined with greater outsourced capacity, this will increase the Company's entire production capacity to more than 7.0 million garment pieces per year by the end of 2007.

"We look forward to delivering on our strategy of strong, profitable growth during the second half of 2007. Our recent private placement financing provides us the additional working capital requirements and provides a solid foundation for continued growth through the remainder of the year. We are hopeful that our new state-of-the-art testing center will receive accreditation during the third quarter, allowing us to provide fabric testing services to our international customers," Mr. Kang said. "We look forward to closing the Catch-Luck transaction which will increase capacity as we seek to become a leader in the Chinese apparel and design industry."

Recent Events

On August 1, the Company filed a Definitive 14C Information Statement related to the acquisition of apparel manufacturer Nanjing Catch-Luck Garments Co, Ltd. Founded in 1995, Catch-Luck has 500 non-union employees with annual production capacity of 800,000 garment pieces. Catch-Luck currently operates one factory covering 6,000 square meters in the Nanjing Jiangning Economic and Technological Development Zone. During the 2006 fiscal year, approximately 52% of the Company's revenues came from customers in Europe, 18% from customers in Japan, 18% from customers in the U.S. and 11% from customers in China. In the first half of 2007, Catch-Luck generated revenues of $9.7 million and net income of $1.2 million. The transaction is valued at $10.0 million, with a cash payment of $0.6 million and $9.4 million in stock, and is expected to close in August 2007.

On August 9, Ever-Glory announced the completion of a $2.0 million private placement of its secured convertible notes. The proceeds will be used to

satisfy the Company's working capital needs and for other administrative expenses.

Restatement of Financial Results

The financial statements for the three and six month periods ended June 30, 2006, and the three months ended March 31, 2007, have been restated to reflect the acquisition of Nanjing New-Tailun Garments Co., Ltd, a Chinese limited liability company ("New-Tailun"), on December 11, 2006, to record the assets and liabilities of New-Tailun at their carrying values rather than their fair- market values at the time of the acquisition.

About Ever-Glory International Group, Inc.

Ever-Glory International Group is a U.S. publicly traded company engaged in international garment manufacturing for well-known middle- to high-grade casual, outer, and sportswear brands. The Company's U.S. headquarters is based in Los Angeles, CA, although Ever-Glory also owns two full subsidiary companies, Nanjing Goldenway Garments Co. Ltd., and New-Tailun Garment Co, Ltd. Ever-Glory has strategic business partners in countries including China, Europe and the U.S. The Company cooperates with well-respected garment retailer chains such as Itochu, Shinko, Debenhams, Next, C&A, Itoyokado and others in handling high- and middle-grade casual wear and sportswear. The Company entered into production and sales cooperation agreements with a number of internationally famous brands such as Matalan, Eddie Bauer, Best-Seller, BB Dakota and others. Ever-Glory employs more than 1,500 people. At present, the market distribution is segmented as 15% in Japan, 54% in Europe, 27% in United States and 3% in China. For more information about Ever-Glory International Group, please visit: www.everglorygroup.com .

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

This press release contains certain "forward-looking statements," as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management's current expectations. Such factors include, but are not limited to the Company's ability to accurately complete product orders, coordinate product design with its customers, ability to expand and grow its distribution channels, political and economic factors in the People's Republic of China, the Company's ability to find attractive acquisition candidates, dependence on a limited number of larger customers and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

-- FINANCIAL TABLES FOLLOW -- EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2007 AND DECEMBER 31, 2006 ASSETS As of As of June 30, December 31, 2007 2006 CURRENT ASSETS Cash and cash equivalents 430,217 660,096 Accounts receivable, net 5,907,370 6,225,936 Accounts receivable - related companies 153,721 2,516,767 Inventories, net 973,777 746,817 Other receivables and prepaid expenses 185,219 83,923 Total Current Assets 7,650,304 10,233,539 PROPERTY AND EQUIPMENT, NET 10,906,513 12,158,912 LAND USE RIGHTS, NET 2,555,790 2,521,109 TOTAL ASSETS 21,112,607 24,913,560 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable 1,495,840 897,609 Accounts payable - related companies 1,272,674 1,408,504 Other payables and accrued liabilities 409,194 3,305,778 Due to related parties 2,215,048 2,621,130 Notes payable 1,967,265 4,482,180 Value added tax 176,445 202,243 Other tax payables 20,831 61,536 Total Current Liabilities 7,557,297 12,978,980 LONG-TERM LIABILITIES Due to a related company 4,356,755 4,238,526 TOTAL LIABILITIES 11,914,052 17,217,506 COMMITMENTS AND CONTINGENCIES -- STOCKHOLDERS' EQUITY Preferred stock ($.0001 par value, authorized 5,000,000 shares, Nil shares issued and outstanding) -- Series A Convertible Preferred Stock ($.0001 par value, authorized 10,000 shares, 7,883 shares issued and outstanding) 1 1 Common stock ($.0001 par value, authorized 100,000,000 shares, issued and outstanding 19,971,758 shares) 1,997 1,997 Common stock to be issued for acquisition (20,833,333 shares) 2,083 2,083 Additional paid-in capital 161,666 161,666 Retained earnings Unappropriated 5,635,829 4,495,408 Appropriated 2,425,711 2,425,711 Accumulated other comprehensive income 971,268 609,188 Total Stockholders' Equity 9,198,555 7,696,054 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 21,112,607 24,913,560 EVER-GLORY INTERNATIONAL GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) For the three For the three For the six For the six months ended months ended months ended months ended June 30, 2007 June 30, 2006 June 30, 2007 June 30, 2006 NET SALES (Restated) (Restated) To related parties $119,844 $13,019 $146,860 $13,019 To third parties 9,457,270 9,213,532 20,859,971 14,443,052 Total net sales 9,577,114 9,226,551 21,006,831 14,456,071 COST OF SALES From related parties (243,975) (1,500,385) (899,785) (2,310,559) From third parties (7,911,144) (6,255,847) (16,980,266) (9,766,313) Total cost of sales (8,155,119) (7,756,232) (17,880,051) (12,076,872) GROSS PROFIT 1,421,995 1,470,319 3,126,780 2,379,199 OPERATING EXPENSES Selling expenses 108,936 150,509 264,195 269,684 Professional fees 139,607 173,759 318,097 346,520 General and administrative expenses 497,843 287,637 934,443 436,470 Depreciation and amortization 73,534 8,151 134,273 16,860 Total Operating Expenses 819,920 620,056 1,651,008 1,069,534 INCOME FROM OPERATIONS 602,075 850,263 1,475,772 1,309,665 OTHER INCOME (EXPENSES) Interest income 2,159 629 3,537 1,370 Interest expenses (129,600) (48,194) (261,890) (58,130) Other income 5,424 4,848 5,450 12,083 Other expenses (41) -- (125) -- Total Other Expenses, net (122,058) (42,717) (253,028) (44,677) INCOME BEFORE INCOME TAX EXPENSE 480,017 807,546 1,222,744 1,264,988 INCOME TAX EXPENSE (6,629) (75,679) (82,323) (142,531) NET INCOME 473,388 731,867 1,140,421 1,122,457 OTHER COMPREHENSIVE INCOME Foreign currency translation gain 231,744 151,246 362,080 238,307 COMPREHENSIVE INCOME 705,132 883,113 1,502,501 1,360,764 Net income share-basic $0.01 $0.02 $0.03 $0.03 Net income share-diluted $0.00 $0.01 $0.01 $0.01 Weighted average number of shares outstanding during the period-basic 40,805,091 40,805,091 40,805,091 40,805,091 Weighted average number of shares outstanding during the period-diluted 100,720,079 100,720,079 100,720,079 100,720,079 EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (UNAUDITED) For the six For the six months ended months ended June 30, 2007 June 30, 2006 CASH FLOWS FROM OPERATING ACTIVITIES (Restated) Net income $1,140,421 $1,122,457 Adjusted to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization - cost of sales 222,980 94,565 Depreciation and amortization 134,273 16,860 Loss on disposal of fixed assets -- 2,467 Changes in operating assets and liabilities (Increase)decrease in: Accounts receivable 462,349 (1,211,181) Accounts receivable - related companies 3,996,241 (3,449,231) Other receivable and prepaid expenses (98,158) (41,533) Inventories (206,105) (88,570) Increase (decrease) in: Accounts payable 568,736 513,915 Accounts payable - related companies (1,774,575) 2,196,303 Other payables and accrued liabilities (161,697) (169,563) Value added tax payables (30,258) 308,260 Income tax and other tax payables (41,615) (47,969) Net cash provided by (used in) operating activities 4,212,592 (753,220) CASH FLOWS FROM INVESTING ACTIVITIES Contribution by stockholder -- 900,000 Purchase of property and equipment (1,538,683) (2,143,764) Net cash used in investing activities (1,538,683) (1,243,764) CASH FLOWS FROM FINANCING ACTIVITIES Due to a related company (286,263) 2,595,158 Repayment of notes payable (4,527,814) -- Proceeds from notes payable 1,940,492 -- Net cash (used in) provided by financing activities (2,873,585) 2,595,158 EFFECT OF EXCHANGE RATE ON CASH (30,203) 105,189 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (229,879) 703,363 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 660,096 1,467,245 CASH AND CASH EQUIVALENTS AT END OF PERIOD 430,217 2,170,608 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the period for interest expenses 128,061 19,778 Cash paid during the period for income taxes 124,373 190,387 For more information, please contact: Ever-Glory International Group, Inc. Mr. Devin Jean, Corporate Secretary Phone: [phone] Email: [e-mail] CCG Elite Investor Relations Crocker Coulson, President Phone: [phone] (New York) Email: [e-mail]

SOURCE Ever-Glory International Group, Inc.

Mr. Devin Jean, Corporate Secretary of Ever-Glory International Group, Inc. at [phone] or [e-mail]; or Crocker Coulson, President of CCG Elite Investor Relations at [phone] (New York) or [e-mail]
www.everglorygroup.com

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Ever-Glory International Issues Open Letter to Shareholders
8:00a ET January 22, 2008 (PR NewsWire)
Ever-Glory International Group, Inc. (OTC Bulletin Board: EVGY) ("Ever-Glory," the "Company"), a leading apparel manufacturer in the People's Republic of China ("PRC"), today released this open letter to shareholders reviewing highlights of 2007 and providing an overview of its strategic plan for the 2008 fiscal year.

Dear Shareholders:

On behalf of the employees, management and board of directors of Ever- Glory, I write to update you on our progress during 2007 and our expectations as we begin the 2008 fiscal year.

In 2007, we acquired two textile manufacturers in the PRC, Nanjing New- Tailun Garments Co, Ltd. and Nanjing Catch-Luck Garments Co., Ltd., which helped us to increase production capacity to an annual rate of 8.0 million pieces per year. This was part of our long-term strategy to meet strong and growing demand from our existing customers while also expanding our customer base. We continue to maintain solid relationships with our long-term customers in Europe, the U.S., Japan and China.

We also set out to build on our historically strong growth in revenues, and it appears we have accomplished that goal again in 2007. Although we will not release our financial results on Form 10-K with the Securities and Exchange Commission for the 2007 fiscal year until the end of March, we estimate that our revenues will be between $68 million to $70 million during the full year 2007, and our projected net income for this period will be between $5.8 million and $6 million.

As we look to 2008, we are working to make domestic growth in China a major part of our strategy and to launch the retail and wholesale distribution of our own youthful lifestyle and fashion products under our own brands in China. We recently entered into an agreement with Shanghai La Chapelle Garment and Accessories Co., Ltd., one of the top-ranked fashion retailers in China which operates over 350 stores across the nation, to launch our "LA GO GO" brand of ladies' wear this month. We plan to expand our retail network to include 80 stores by the end of this year. Over time, we believe sales of lifestyle and fashion products under our own brand names in China will enable us to achieve greater balance in our revenues from both overseas and domestic markets.

Building upon our accomplishments in 2007, we are eager to demonstrate additional progress in 2008. In fiscal 2008, we expect to generate revenues of $90 million to $100 million and net income of $8 million to $8.6 million.

Finally, we are pursuing plans to have our shares listed on a national exchange in the U.S., which we believe will provide additional benefits to our shareholders. Toward that end, we are currently seeking additional independent directors for our board of directors, in order to fulfill one important aspect of the listing requirements for a national exchange.

Thank you for your continued support of Ever-Glory. We look forward to updating you on our progress throughout the year.

Sincerely, Edward Yihua Kang Chairman, Chief Executive and President Ever-Glory International Group, Inc.

About Ever-Glory International Group, Inc.

Ever-Glory International Group (OTC Bulletin Board: EVGY) is a U.S. publicly-traded company engaged in international garment manufacturing for well-known middle- to high-grade casual, outer, and sportswear brands. The company's U.S. headquarters is based in Los Angeles, California, although Ever-Glory also has three subsidiaries, Goldenway Nanjing Garments Co. Ltd., Nanjing New-Tailun Garments Co, Ltd. and Nanjing Catch-Luck Garments Co., Ltd. Ever-Glory has strategic business partners in countries including China, Europe and the U.S. The company cooperates with well-respected garment retailer chains such as Itochu, Shinko, Debenhams, Next, C&A, Itoyokado and others in handling high- and middle-grade casual wear and sportswear. The company entered into production and sales cooperation agreements with a number of internationally famous brands such as Matalan, Eddie Bauer, Best-Seller, BB Dakota and others. Ever-Glory employs more than 2,000 people. Currently, 59% of the company's total sales revenue is from Europe, 21% from the United States, 13% from Japan and 6% from within China. For more information about Ever-Glory International Group, please visit: www.everglorygroup.com .

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This press release contains certain "forward-looking statements," as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from management's current expectations. Such factors include, but are not limited to, the company's ability to accurately complete product orders, coordinate product design with its customers, ability to expand and grow its distribution channels, political and economic factors in the People's Republic of China, the company's ability to find attractive acquisition candidates and joint venture partners, the performance of third parties with whom the company does business, dependence on a limited number of larger customers and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should be read and considered in conjunction with the "risk factors" disclosed in the company's periodic reports and registration statements on file with the U.S. Securities and Exchange Commission.

For more information, please contact: Ever-Glory International Group, Inc. Mr. Devin Jin, Corporate Secretary Tel: [phone] Email: [e-mail] CCG Elite Investor Relations Crocker Coulson, President Tel: [phone] (New York) Email: [e-mail]

SOURCE Ever-Glory International Group, Inc.

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