LOS ANGELES, Aug. 13, 2018 (GLOBE NEWSWIRE) -- Nova LifeStyle, Inc. (NASDAQ: NVFY), a leading U.S.-based, innovative designer and distributor of modern LifeStyle home products, today announced solid financial results for the second quarter ended June 30, 2018.
Second Quarter 2018 Financial Highlights (all comparisons are to the same period in 2017):
- Net income increased 150% to $1.4 million, or $0.05 per diluted share, compared to net income of $0.6 million or $0.02 per diluted share.
- Revenue increased 24% to $24.1 million, compared to $19.5 million.
- Gross profit was $4.2 million, up 21.1%, compared to $3.5 million.
- Average selling prices (ASPs) rose nearly 20% driven by high margin household products.
- Sofas, TV cabinets and beds were the top selling product lines at 53%, 20% and 8% of revenues, respectively.
- Entered into proprietarily designed office furniture markets.
- Anticipate robust sales and earnings growth throughout the remainder of 2018.
Six Months 2018 Financial Highlights (all comparisons are to the same period in 2017):
- Net income was $3.0 million, or $0.11 per diluted share, compared to a net loss of $(0.7) million, or $(0.02) per diluted share.
- Revenues increased 23.5% to $46.4 million, compared to $37.6 million.
- Gross profit for the first half of 2018 was $9.1 million, up 47.5%, compared to $6.2 million.
- Balance sheet well-positioned with approximately $2.60 per share in net assets at June 30, 2018.
Management Commentary
Tawny Lam, Chief Executive Officer of Nova LifeStyle, commented, "Nova Lifestyle is pleased to announce another quarter of great financial results. Our strategy of focusing on high-end products continues to validate our growth strategies, evidenced by a year over year revenue increase of over 23%. In particular, the Company saw gains in both ASPs and volumes shipped, reflecting that our extensive product offerings through catalogues are gaining momentum. Our international growth has been solid, particularly in Australia, where we have leveraged our relationships and brand recognition to serve customers in the hotel and hospitality industries.”
“In addition to home furnishing products, Nova LifeStyle is now offering a proprietarily designed ‘Office’ product line that greatly complements our existing catalogues. We are currently experiencing substantial cross-selling demand from commercial customers as companies look for beautifully designed and functional office environments to attract and retain employees in today’s low unemployment economy. Going forward, the Office product line will become an added sales channel that integrates corporate apartments and residential furniture adoptions. We anticipate significant sales and earnings growth to continue in the second half of 2018.”
About Nova LifeStyle
Nova LifeStyle, Inc., a NASDAQ Global Market listed company headquartered in California, is a fast growing, innovative designer and distributor of modern LifeStyle furniture; primarily sofas, dining rooms, cabinets, office furniture and related components, bedrooms, and various accessories in matching collections. Nova's products are made in the US, Europe, and Asia that include LifeStyle brands such as Diamond Sofa, Nova QwiK, and Bright Swallow International. Nova's products feature urban contemporary styles that integrate comfort and functionality, incorporating upscale luxury designs appeals to middle and upper middle-income consumers in the U.S., China, Europe, and elsewhere in the world. Visit Nova LifeStyle’s website at www.NovaLifeStyle.com.
Safe Harbor Statement
All statements in this press release that are not historical are forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual results will not differ from the company's expectations. You are cautioned not to place undue reliance on any forward-looking statements in this press release as they reflect Nova's current expectations with respect to future events and are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated. Potential risks and uncertainties include, but are not limited to, the risks described in Nova's filings with the Securities and Exchange Commission.
Company Contact:
Investor Relations:
The Equity Group Inc.
In U.S.
Adam Prior, Senior Vice President
+1 (212) 836-9606
aprior@equityny.com
NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED)
| Six Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Net Sales | $ | 46,412,102 | $ | 37,590,789 | $ | 24,108,630 | $ | 19,533,767 | |||||||
| Cost of Sales | 37,305,319 | 31,417,150 | 19,903,389 | 16,061,903 | |||||||||||
| Gross Profit | 9,106,783 | 6,173,639 | 4,205,241 | 3,471,864 | |||||||||||
| Operating Expenses | |||||||||||||||
| Selling expenses | 1,681,058 | 1,686,436 | 1,049,905 | 711,434 | |||||||||||
| General and administrative expenses | 3,848,564 | 5,483,709 | 1,542,891 | 2,458,033 | |||||||||||
| Total Operating Expenses | 5,529,622 | 7,170,145 | 2,592,796 | 3,169,467 | |||||||||||
| Income From Operations | 3,577,161 | (996,506 | ) | 1,612,445 | 302,397 | ||||||||||
| Other Income (Expenses) | |||||||||||||||
| Non-operating expense, net | 4,082 | 797 | 4,082 | 797 | |||||||||||
| Foreign exchange transaction loss | (441 | ) | (230 | ) | (305 | ) | (190 | ) | |||||||
| Interest expense, net | (55,786 | ) | (92,161 | ) | (24,204 | ) | (37,755 | ) | |||||||
| Financial expense | (69,497 | ) | (51,827 | ) | (38,777 | ) | (25,767 | ) | |||||||
| Total Other Expenses, Net | (121,642 | ) | (143,421 | ) | (59,204 | ) | (62,915 | ) | |||||||
| Income Before Income Taxes | 3,455,519 | (1,139,927 | ) | 1,553,241 | 239,482 | ||||||||||
| Income Tax Expense (Benefit) | 437,193 | (488,003 | ) | 189,936 | (317,984 | ) | |||||||||
| Net Income (Loss) | 3,018,326 | (651,924 | ) | 1,363,305 | 557,466 | ||||||||||
| Other Comprehensive (Loss) | |||||||||||||||
| Release of foreign currency translation adjustments upon disposal of subsidiaries | |||||||||||||||
| Foreign currency translation | -- | -- | -- | -- | |||||||||||
| Comprehensive Income (Loss) | $ | 3,018,326 | $ | (651,924 | ) | $ | 1,363,305 | $ | 557,466 | ||||||
| Basic weighted average shares outstanding | 28,304,183 | 27,429,885 | 28,043,687 | 27,513,733 | |||||||||||
| Diluted weighted average shares outstanding | 28,650,857 | 27,429,885 | 28,524,134 | 27,516,902 | |||||||||||
| Net income (loss) per share of common stock | |||||||||||||||
| Basic | $ | 0.11 | $ | (0.02 | ) | $ | 0.05 | $ | 0.02 | ||||||
| Diluted | $ | 0.11 | $ | (0.02 | ) | $ | 0.05 | $ | 0.02 | ||||||
NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2018 (UNAUDITED) AND DECEMBER 31, 2017
| June 30, 2018 | December 31, 2017 | ||||
| Assets | |||||
| Current Assets | |||||
| Cash and cash equivalents | $ | 7,803,679 | $ | 5,722,716 | |
| Accounts receivable, net | 55,274,251 | 54,006,513 | |||
| Advance to suppliers | 15,205,316 | 8,580,609 | |||
| Inventories | 5,882,945 | 6,374,560 | |||
| Prepaid expenses and other receivables | 245,233 | 232,935 | |||
| Total Current Assets | 84,411,424 | 74,917,333 | |||
| Noncurrent Assets | |||||
| Plant, property and equipment, net | 149,357 | 157,246 | |||
| Lease deposit | 43,260 | 43,260 | |||
| Goodwill | 218,606 | 218,606 | |||
| Intangible assets, net | 3,999,256 | 4,202,608 | |||
| Deferred tax asset | 318,961 | 318,961 | |||
| Total Noncurrent Assets | 4,729,440 | 4,940,681 | |||
| Total Assets | $ | 89,140,864 | $ | 79,858,014 | |
NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS – CONTINUED
JUNE 30, 2018 (UNAUDITED) AND DECEMBER 31, 2017
| June 30, 2018 | December 31, 2017 | ||||
| Liabilities and Stockholders' Equity | |||||
| Current Liabilities | |||||
| Accounts payable | $ | 3,944,397 | $ | 1,634,554 | |
| Line of credit | 7,306,830 | - | |||
| Advance from customers | 48,808 | 19,826 | |||
| Accrued liabilities and other payables | 640,769 | 847,756 | |||
| Income tax payable | 324,892 | 178,307 | |||
| Total Current Liabilities | 12,265,696 | 2,680,443 | |||
| Noncurrent Liabilities | |||||
| Line of credit | - | 4,202,118 | |||
| Income tax payable | 4,591,257 | 4,527,849 | |||
| Total Noncurrent Liabilities | 4,591,257 | 8,729,967 | |||
| Total Liabilities | 16,856,953 | 11,410,410 | |||
| Contingencies and Commitments | |||||
| Stockholders' Equity | |||||
| Common stock, $0.001 par value; 75,000,000 shares authorized, | |||||
| 28,399,610 and 28,191,927 shares issued and outstanding; | 28,400 | 28,192 | |||
| as of June 30, 2018 and 2017, respectively | |||||
| Additional paid-in capital | 39,500,150 | 38,682,377 | |||
| Statutory reserves | 6,241 | 6,241 | |||
| Retained earnings | 32,749,120 | 29,730,794 | |||
| Total Stockholders' Equity | 72,283,911 | 68,447,604 | |||
| Total Liabilities and Stockholders' Equity | $ | 89,140,864 | $ | 79,858,014 | |
NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED)
| Six Months Ended June 30, | |||||||
| 2018 | 2017 | ||||||
| Cash Flows From Operating Activities | |||||||
| Net income (loss) | $ | 3,018,326 | $ | (651,924 | ) | ||
| Adjustments to reconcile net income to net cash used in | |||||||
| operating activities: | |||||||
| Depreciation and amortization | 222,741 | 762,150 | |||||
| Deferred tax benefit | -- | (648,961 | ) | ||||
| Stock compensation expense | 843,296 | 913,264 | |||||
| Changes in bad debt allowance | 169,909 | 504,324 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (1,437,646 | ) | 9,997,317 | ||||
| Advance to suppliers | (624,708 | ) | 0,922,714 | ) | |||
| Inventories | 491,615 | 768,120 | |||||
| Other current assets | (69,820 | ) | (267,052 | ) | |||
| Accounts payable | 2,309,843 | (2,296,941 | ) | ||||
| Advance from customers | 28,982 | (497,484 | ) | ||||
| Accrued liabilities and other payables | (206,281 | ) | 186,081 | ||||
| Taxes payable | 209,993 | 160,959 | |||||
| Net Cash Used in Operating Activities | (1,043,750 | ) | (1,992,861 | ) | |||
| Cash Flows From Investing Activities | |||||||
| Assignment fee received | -- | 1,250,000 | |||||
| Purchase of property and equipment | (11,499 | ) | (2,132 | ) | |||
| Advances to unrelated parties | -- | (8,835,000 | ) | ||||
| Repayment from unrelated parties | -- | 15,835,000 | |||||
| Net Cash (Used in) provided by Investing Activities | (11,499 | ) | 8,247,868 | ||||
| Cash Flows From Financing Activities | |||||||
| Proceeds from line of credit and bank loan | 39,802,918 | 23,094,342 | |||||
| Repayment to line of credit and bank loan | (36,698,206 | ) | (26,765,110 | ) | |||
| Proceeds from the exercise of options for common stocks | 31,500 | -- | |||||
| Net Cash provided by (Used in) Financing Activities | 3,136,212 | (3,670,768 | ) | ||||
NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE SIX MONTHS ENDED MARCH 31, 2018 AND 2017 (UNAUDITED)
| Six Months Ended June 30, | |||||
| 2018 | 2017 | ||||
| Effect of Exchange Rate Changes on Cash and Cash Equivalents | -- | -- | |||
| Net (decrease) increase in cash and cash equivalents | 2,080,963 | 2,584,239 | |||
| Cash and cash equivalents, beginning of period | 5,722,716 | 2,587,743 | |||
| Cash and cash equivalents, ending of period | $ | 803,679 | $ | 5,171,982 | |
| Analysis of cash and cash equivalents | |||||
| Included in cash and cash equivalents per consolidated balance sheets | 7,803,679 | 5,171,982 | |||
| Cash and cash equivalents, end of period | $ | 7,803,679 | $ | 5,171,982 | |
| Supplemental Disclosure of Cash Flow Information | |||||
| Cash paid during the period for: | |||||
| Income tax payments | $ | 227,200 | $ | -- | |
| Interest expense | $ | 55,828 | $ | 118,753 | |