NANJING, China, June 25 /Xinhua-PRNewswire/ -- Ever-Glory International Group, Inc. (OTC Bulletin Board: EGLY) ("Ever-Glory," "the Company"), a leading apparel manufacturer in the People's Republic of China ("PRC"), announced today that it will amend its annual report on Form 10-KSB for the year ended December 31, 2006, and its quarterly report on Form 10-QSB for the quarter ended March 31, 2007, to properly account for the acquisition of Nanjing New-Tailun Garments Co., Ltd, a Chinese limited liability company ("New-Tailun"), on December 11, 2006.
On June 22, 2007, the Company's Board of Directors determined that the financial statements for the fiscal year ended December 31, 2006, and the quarter ended March 31, 2007, should no longer be relied upon. The New-Tailun acquisition was originally recorded at the fair-market value of the assets acquired under the purchase accounting method. However, the Company, along with its independent auditors, has determined the assets and liabilities of New-Tailun should have been recorded at their carrying values rather than their fair-market values at the time of the acquisition. Accordingly, the full-year 2006 and first-quarter 2007 financial statements will be prepared as if the merger had occurred retroactively.
"Ever-Glory is committed to providing our shareholders with the highest level of financial disclosure. We are working closely with our auditors to complete the restatement of our previously issued financial results as expediently as possible," said Kang Yihua, the Company's Chairman, Chief Executive Officer and President. "We continue to strengthen our internal accounting staff and processes to enable our continued growth in the apparel industry."
For the 2006 fiscal year, the Company expects total assets and stockholders' equity as of December 31, 2006, to be reduced by approximately $10 million. Full-year 2006 net sales are expected to be increased by approximately $9.6 million, and net income is expected to rise by approximately $0.9 million. The Company also anticipates no impact on fiscal-year 2006 diluted earnings per share.
Management expects total assets and total stockholders' equity as of March 31, 2007, will be reduced by approximately $10 million.
About Ever-Glory International Group, Inc.
Ever-Glory International Group, Inc. 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 China, Europe, the U.S. and Japan. The Company cooperates with well-respected apparel retail chains such as Itochu, Shinko, Debenhams, Next, C&A, Itoyokado and others in handling high- and middle-grade casual wear and sportswear. The Company has also entered into production and sales cooperation agreements with a number of internationally famous brands such as BB Dakota, Best-Seller, Eddie Bauer, Levi Strauss, Matalan and others. Ever-Glory employs more than 1,500 people. For more information about Ever-Glory International Group, please visit: http://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.
