Total sales for the year ended December 31, 2012 were $279.6 million, an increase of 29.6% from the year ended December 31, 2011. This increase was primarily attributable to increased sales in our retail business as well as our wholesale business.
In 2012, retail sales from LA GO GO, the Company's branded retail division, increased 102.8% to $108.6 million, compared to $53.5 million in 2011. This increase was primarily due to the increase in new stores opened and same store sales. Ever-Glory had 727 LA GO GO stores as of December 31, 2012, compared to 467 LA GO GO stores at December 31, 2011. Currently, there are LA GO GO stores in more than 20 provinces in China.
In 2012, wholesale sales generated from the Company's wholesale business increased 5.4% to $171.0 million, compared to $162.2 million last year. This increase was primarily attributable to increased sales in the PRC, the United Kingdom and Japan partially offset for decreased sales in Germany and the United States..
Total gross profit for the year 2012 was $65.1 million, or 23.3% of total sales, compared to $44.5 million, or 20.6% of total sales last year.
Selling expenses for the year 2012 increased 85.8% to $33.7 million compared to $18.1 million last year. As a percentage of sales, selling expenses increased 370 basis points to 12.1% compared to 8.4% last year. The increase was attributable to the increased number of stores, leading to increased numbers of retail employees and increased average salaries, as well as the increased store decoration and marketing expenses associated with the promotion of the LA GO GO brand.
General and administrative expenses for the year 2012 increased 13.3% to $16.2 million compared to $14.3 million last year. As a percentage of sales, general and administrative expenses decreased 80 basis points to 5.8% compared to 6.6% last year. The decrease was attributable to the increase in sales.
Income from operations increased 25.1% to $15.1 million in 2012 compared to $12.1 million in 2011. As a percent of sales, income from operations accounted for 5.4% of our total sales in 2012, a decrease of 0.2% compared to 2011.
For 2012, net income was $12.8 million, or $0.87 per diluted share, an increase of 32.7% from $9.6 million, or $0.65 per diluted share in 2011. Net income for 2012 includes approximately $0.1 million, or $0.01 per diluted share, of non-cash income related to the change in fair value of a derivative liability compared to approximately $0.2 million, or $0.01 per diluted share, of non-cash income related to the change in fair value of a derivative liability for 2011. Excluding this non-cash item for 2012 and 2011, non-GAAP diluted earnings per share were $0.86 in 2012 compared to $0.64 in 2011.
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, and has a focus on middle-to-high grade casual wear, outerwear, and sportswear brands.
Ever-Glory International Group
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