Ever-Glory Reports First Quarter 2009 Financial Results

      -- 1Q09 Total Net Sales Increased 3.9% YoY to $20.5 Million --

     -- 1Q09 Gross Margin Increased 420 Basis Points YoY to 23.0% --

         -- 1Q09 Net Income Increased 34.1%YoY to $1.6 Million --

 -- Company Reiterates Comfort with Full Year 2009 Financial Forecast --



NANJING, China, May 13 /PRNewswire-Asia-FirstCall/ -- Ever-Glory International Group, Inc. (the "Company," "Ever-Glory") (NYSE Amex: EVK), a leading apparel supply chain manager and retailer in China, today reported its financial results for the quarter ended March 31, 2009.

During the first quarter 2009, net sales increased 3.9% to $20.5 million from $19.7 million in the same period of 2008.  This increase was primarily attributable to increased sales orders in our wholesale business to customers in Japan and increased sales in the Company's retail business.  Retail sales from LA GO GO, the Company's branded retail division, increased to $2.5 million, or 12.3% of total net sales, compared to $120 thousand in the prior year period.

"Our performance was solid during the first quarter of 2009, especially given the global economic slowdown," commented Mr. Edward Yihua Kang, Chairman of the Board and Chief Executive Officer of Ever-Glory.  "Our growth held steady in the quarter and we believe that our business model as a one-stop- service for wholesale apparel production will continue to position us very competitively going forward.  We remain focused on developing a high quality production platform and expanded production capacity.  We have increased the innovative fashion concepts within our wholesale business by strengthening our design talent and enhanced our R&D infrastructure to add more style samples and fabric sampling.  These efforts should allow us to broaden our sales opportunities even during challenging market conditions."

Mr. Kang continued, "We are very encouraged by our retail strategy and the roll out of our LA GO GO stores.  Sales generated from our retail business increased considerably in the first quarter of 2009 which demonstrated the strong momentum we have with our retail strategy. In the first quarter of 2009, we opened nine new LA GO GO stores for a total of 102 open stores, as of March 31, 2009.  Through May 13, 2009, we opened 19 LA GO GO stores in 2009 and now have a total of 112 LA GO GO stores in China."

In the first quarter of 2009, gross profit increased 26.7% to $4.7 million from $3.7 million in the same period of 2008.  Gross margin increased 420 basis points to 23.0% in the first quarter of 2009, compared to 18.8% in the same period of 2008 largely due to increased fixed processing fees on certain manufacturing orders as well as increased leverage in the retail business.

Selling expenses increased to $940 thousand in the first quarter of 2009 from $278 thousand in the first quarter of 2008.  This increase was primarily due to increased retail marketing expenses to promote LA GO GO.  General and administrative expenses increased 31.4% to $1.9 million from $1.4 million in the first quarter of 2008.  The increase was primarily due to increased payroll to retain and attract management staff in order to execute the Company's business expansion as well as additional costs to support the Company's retail operations.  Income from operations for the first quarter of 2009 was $1.9 million, or 9.4% of total sales, compared to $2.0 million, or 10.3% of sales, in the first quarter of 2008.

Net income for the first quarter of 2009 increased 34.1% to $1.6 million or $0.12 per diluted share from $1.2 million, or $0.10 per diluted share in the same period of 2008.

Balance Sheet and Cash Flow

As of March 31, 2009, the Company had $3.8 million of cash and cash equivalents, compared to $1.4 million at December 31, 2008, Ever-Glory had working capital of approximately $15.5 million at March 31, 2009.  The Company had bank loans of $6.6 million as of March 31, 2009.

Business Outlook

For the second quarter of 2009, the Company anticipates total net sales of $20 million to $25 million and net income of $1.2 million to $1.5 million. This compares to second quarter 2008 sales of $24 million and net income of $1.3 million.  For full year 2009, the Company anticipates total net sales of $120 million to $135 million and net income of $5.8 million to $6.5 million. The full year revenue forecast is comprised of $110 million to $120 million in expected wholesale revenue and $10 million to $15 million in expected revenue from retail.

Mr. Kang continued, "Even in such a difficult economic environment, we are encouraged with the opportunities in our business moving forward. We believe our unique operating philosophy provides us with a distinct competitive advantage over our peers.  The nature of our one-stop-service has Ever-Glory involved in all aspects of apparel production -- product design and development, sourcing and sampling, quality control, manufacturing and logistics.  We achieve better results by shortening the time to market, improving product quality control and ultimately achieving higher margins.  As we execute our strategic vision, we continue to leverage our intimate market knowledge, experienced sourcing professionals and efficient management to deploy a global sourcing and product development network while maintaining strict product quality control and expense control.  We place considerable emphasis on innovative and distinctive product designs that stand for exceptional styling and quality for both our wholesale and retail businesses. As we increase our network of professional designers, marketers and R&D team members, we believe we have a unique opportunity to expand our presence as a major player in the international wholesale and domestic retail apparel market."

Conference Call

The Company will hold a conference call today at 8:30 a.m. ET which will be hosted by Edward Kang, Chairman of the Board, President, and CEO, Yan Guo, Chief Financial Officer.  Listeners may access the call by dialing #1-913-312- 0953.  The conference call will also be broadcast live over the Internet and can be accessed at the Company's web site at the following URL: http://www.everglorygroup.com/ .

A replay of the call will be available from May 13, 2009 through May 20, 2009 by calling #1-719-457-0820; pin number: 7464961.  A webcast of the call will also be available on the Company's web at: http://www.everglorygroup.com/ .

About Ever-Glory International Group, Inc.

Based in Nanjing, China, Ever-Glory International Group, Inc. is a leading apparel supply chain manager and retailer in China. Ever-Glory is the first Chinese apparel company listed on the American Stock Exchange (now called NYSE Amex), and has a focus on middle-to-high grade casual wear, outerwear, and sportswear brands.  The Company maintains global strategic partnerships in Europe, the United States, Japan and China, conducting business with several well-known brands and retail chain stores.  In addition, Ever-Glory operates its own domestic chain of retail stores known as "LA GO GO."

Safe Harbor Statement

Certain statements in this release and other written or oral statements made by or on behalf of the Company are "forward looking statements" within the meaning of the federal securities laws.  Statements regarding future events and developments and our future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future are forward-looking statements within the meaning of these laws.  The forward looking statements are subject to a number of risks and uncertainties including market acceptance of the Company's products and projects, the Company's continued access to capital, currency exchange rate fluctuation and other risks and uncertainties.  The actual results the Company achieves may differ materially from those contemplated by any forward-looking statements due to such risks and uncertainties.  These statements are based on our current expectations and speak only as of the date of such statements. Readers should carefully review the risks and uncertainties described in the Company's latest Annual Report on Form 10-K and other documents that the Company files from time to time with the U.S. Securities and Exchange Commission.

            EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSDIARIES
                    CONDENSED CONSOLIDATED STATEMENTS OF
                     OPERATIONS AND COMPREHENSIVE INCOME

       FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 (UNAUDITED)

                                                     2009         2008
  NET SALES

   Related parties                              $          -- $    425,102
   Third parties                                   20,507,822   19,322,106
     Total net sales                               20,507,822   19,747,208

  COST OF SALES

   Related parties                                         --      402,748
   Third parties                                   15,793,667   15,623,424
     Total cost of sales                           15,793,667   16,026,172

  GROSS PROFIT                                      4,714,155    3,721,036

  OPERATING EXPENSES
   Selling expenses                                   940,474      277,528
   General and administrative expenses              1,856,122    1,412,654
     Total Operating Expenses                       2,796,596    1,690,182


  INCOME FROM OPERATIONS                            1,917,559    2,030,854

  OTHER INCOME (EXPENSES)

   Interest income                                    103,547       31,974

   Interest expense                                  (123,650)    (577,828)

   Other income                                         2,373           --

     Total Other Income (Expenses)                    (17,730)    (545,854)


  INCOME BEFORE INCOME TAX EXPENSE                  1,899,829    1,485,000


  INCOME TAX EXPENSE                                 (289,071)    (283,838)


  NET INCOME                                        1,610,758    1,201,162

  ADD(LESS): NET LOSS(INCOME) ATTRIBUTABLE TO
   THE NONCONTROLING INTEREST                          11,598       (3,869)


  NET INCOME ATTRIBUTABLE TO THE COMPANY            1,622,356    1,197,293


   Foreign currency translation (loss) gain           (44,208)   1,099,884

  COMPREHENSIVE INCOME                              1,578,148    2,297,177

  COMPREHENSIVE INCOME ATTRIBUTABLE TO

  THE NONCONTROLING INTEREST                          (12,392)      23,457

  COMPREHENSIVE INCOME ATTRIBUTABLE TO
   THE COMPANY                                  $   1,590,540 $  2,273,720


  NET INCOME PER SHARE
  Attributable to the Company's common
   stockholders

   Basic                                        $        0.12 $       0.10

   Diluted                                      $        0.12 $       0.10

  Weighted average number of shares outstanding

   Basic                                           13,531,225   11,449,682

   Diluted                                         13,531,225   12,204,363




                    CONDENSED CONSOLIDATED BALANCE SHEETS
            AS OF MARCH 31, 2009 (UNAUDITED) AND DECEMBER 31, 2008

                                    ASSETS
                                                 March 31,     December 31,
                                                    2009           2008
                                                (unaudited)

  CURRENT ASSETS

   Cash and cash equivalents                 $    3,833,600 $    1,445,363
   Accounts receivable                           12,970,781      9,485,338
   Accounts receivable - related parties             73,900             --
   Inventories                                    2,856,073      3,735,227
   Other receivables and prepaid expenses           433,038        945,191
   Advances on inventory purchases                  209,321        288,256
   Amounts due from related party                10,754,680     11,565,574
     Total Current Assets                        31,131,393     27,464,949

  LAND USE RIGHT, NET                             2,834,195      2,854,508
  PROPERTY AND EQUIPMENT, NET                    12,799,944     12,494,452
  INVESTMENT AT COST                              1,465,000      1,467,000

  TOTAL ASSETS                               $   48,230,532 $   44,280,909

                            LIABILITIES AND EQUITY

  CURRENT LIABILITIES
   Bank loans                                $    6,592,500 $    6,542,820
   Accounts payable                               5,290,568      3,620,543
   Other payables - related party                   903,416        754,589
   Other payables and accrued liabilities         1,813,614      1,683,977
   Value added and other taxes payable              656,583        368,807
   Income tax payable                               207,550        257,946
   Deferred tax liabilities                         176,086         80,009
   Total Current Liabilities                     15,640,317     13,308,691


  LONG-TERM LIABILITIES
   Loan from related party                        2,689,350      2,660,085
  TOTAL LIABILITIES                              18,329,667     15,968,776

  COMMITMENTS AND CONTINGENCIES

  EQUITY
   Stockholders' equity of the Company
   Preferred stock ($.001 par value,
    authorized 5,000,000 shares,
    no shares issued and outstanding)                    --             --
   Common stock ($.001 par value, authorized
    50,000,000 shares, 12,394,652 and
    12,373,567 shares issued and outstanding
    as of March 31,2009 and December 31, 2008,
    respectively)                                    12,395         12,374

   Additional paid-in capital                     4,571,164      4,549,004

   Retained earnings                             17,429,895     15,807,539

   Statutory reserve                              3,437,379      3,437,379

   Accumulated other comprehensive income         3,912,652      3,956,860
     Total Stockholders' Equity of the
      Company                                    29,363,485     27,763,156

   Noncontrolling interest                          537,380        548,977

   Total Equity                                  29,900,865     28,312,133


  TOTAL LIABILITIES AND EQUITY               $   48,230,532 $   44,280,909



               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
          FOR THE MONTHS ENDED MARCH 31, 2009 AND 2008 (UNAUDITED)

                                                      2009          2008
  CASH FLOWS FROM OPERATING ACTIVITIES

   Net income                                 $    1,610,758 $   1,201,162
   Adjustments to reconcile net income to
    cash provided by operating activities:

     Depreciation and amortization                   484,005       238,432

     Deferred income tax                              96,194            --
     Amortization of discount on convertible
      notes                                               --       349,337

     Amortization of deferred financing costs             --        73,676

     Stock issued for interest                            --         2,006
   Changes in operating assets and
    liabilities

     Accounts receivable                          (3,488,612)    1,941,016

     Accounts receivable - related parties           (73,905)      161,317

     Inventories                                     874,121       121,586

     Other receivables and prepaid expenses         (227,276)       (8,636)

     Advances on inventory purchases                  78,547        (9,058)

     Amounts due from related party                  795,181       (44,291)

     Accounts payable                              1,675,077       299,523

     Accounts payable - related parties              148,837       (68,882)

     Other payables and accrued liabilities          151,499      (204,734)

     Other payables-related parties                    2,327            --

     Value added and other taxes payable             288,298       123,406

     Income tax payable                              (50,047)      196,038

     Long term deferred expense                                    (56,406)
       Net cash provided by operating
        activities                                 2,365,004     4,315,492

  CASH FLOWS FROM INVESTING ACTIVITIES


   Other payables-related party                           --            --

   Investment in La Chapelle                              --    (1,397,700)

   Purchase of property and equipment                (65,719)      (84,333)

   Proceeds from sale of equipment                     3,778           377

     Net cash used in investing activities           (61,941)   (1,481,656)

  CASH FLOWS FROM FINANCING ACTIVITIES

   Contribution from minority shareholders                --       553,040

   Proceeds from bank loans                        5,860,400            --

   Repayment of bank loans                        (5,801,796)   (2,096,550)

   Proceeds from long term loan                       29,265        59,116

     Net cash provided by financing activities        87,869    (1,484,394)


  EFFECT OF EXCHANGE RATE CHANGES ON CASH             (2,695)      153,487


  NET INCREASE IN CASH AND CASH EQUIVALENTS        2,388,237     1,502,930

  CASH AND CASH EQUIVALENTS AT BEGINNING OF
   PERIOD                                          1,445,363       641,739


  CASH AND CASH EQUIVALENTS AT END OF PERIOD  $    3,833,600 $   2,144,669

  SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

  Cash paid during the period for:

   Interest                                   $      144,646 $      68,859

   Income taxes                               $      242,924 $      84,576


DATASOURCE: Ever-Glory International Group, Inc.



CONTACT:  Company Contact - Ever-Glory International Group, Inc., Yan Guo,

Chief Financial Officer, [phone]; Investor Relations: In the U.S.:

Brian M. Prenoveau, CFA, ICR, Inc., [phone], or In Asia: Bill Zima &

Yuening Jiang, [phone] 



Web Site:  http://www.everglorygroup.com/ 

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