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Ever-Glory International (EVK) Posts Solid Sales Increase for FY2010 driven by Branded Retail Division

Ever-Glory International Group Inc., a leading apparel supply chain manager and retailer based in China, today reported its financial results for its fiscal year ended December 31, 2010, reporting a nearly 50% increase in net sales. The company attributes its strong retail figures to its April 2010 acquisition of the 40 percent interest in LA GO GO from its joint-venture partner, bringing the company’s stake in the retail business to 100 percent.

During the fiscal year 2010, net sales increased 49.3 percent to $134.1 million as compared to $89.9 million in 2009. The increase in sales was primarily attributable to increased sales in Ever-Glory’s retail business as well as its wholesale business in China.

In 2010, retail sales from LA GO GO, the company’s wholly owned branded retail division, increased 122.1 percent to $29.3 million, compared to $13.2 million in 2009. Sales generated from the company’s wholesale business increased 36.7 percent to $104.8 million, compared to $76.7 million reported in 2009.

Total gross profit in 2010 increased 42.9 percent to $26.2 million from $18.3 million a year ago. Gross margin decreased to 19.5 percent in 2010, compared to 20.4 percent in 2009.

Ever-Glory has fully integrated the LA GO GO business and management into the company, and through continued implementation of the company’s brand strategy, Edward Yihua Kang, chairman of the board and CEO of Ever-Glory, said he believes that through 2011 and beyond the company will continue to drive a strong performance.

“In 2011, we plan to continue to develop LA GO GO through perfecting design styles, improving store management efficiency and opening more stores in desired locations,” continued Kang stated in the press release. “We are confident that, through these measures, we can enhance same-store sales, expand LA GO GO’s market penetration and increase its brand influence in China.”

As of December 31, 2010, the company reported approximately $3.7 million of cash and cash equivalents, compared to approximately $3.6 million as of December 31, 2009. Ever-Glory had working capital of approximately $24.5 million as of December 31, 2010, and outstanding bank loans of approximately $18.1 million as of December 31, 2010.

Ever-Glory also offered its forecast for 2001, with anticipated first-quarter total net sales of $45 million-$55 million and net income of $1.8 to $2.2 million. For full year 2011, Every-Glory anticipates total net sales between $180 million and $215 million and net income between $7.3 million and $9.0 million. The full year revenue forecast is comprised of $120 million to $150 million in expected wholesale revenue and $60 million to $65 million in expected revenue from retail operations.

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