Weekly News

Nova LifeStyle Announces First Quarter Financial Results

May 14,2018 23:32

LOS ANGELES, May 14, 2018 (GLOBE NEWSWIRE) -- Nova LifeStyle, Inc. (NASDAQ:NVFY), a leading U.S.-based, innovative designer and distributor of modern LifeStyle home products, today announced financial results for the first quarter ended March 31, ...


May 14, 2018 07:45 ET | Source: Nova LifeStyle, Inc.

LOS ANGELES, May 14, 2018 (GLOBE NEWSWIRE) -- Nova LifeStyle, Inc. (NASDAQ:NVFY), a leading U.S.-based, innovative designer and distributor of modern LifeStyle home products, today announced financial results for the first quarter ended March 31, 2018.
First Quarter 2018 Financial Highlights (all comparisons are to the same period of the prior year):
First quarter revenues were $22.3 million, up 23.5%, compared to $18.1 million.
Net income in the first quarter of 2018 was $1.6 million, or $0.06 per diluted share, compared with a net loss of $(1.2) million in the first quarter of 2017, resulting in an EPS loss of $(0.04).
Gross profit for the first quarter was $4.9 million, up 81.4%, compared to $2.7 million.      
First quarter Gross Margin was 22.0%, compared to 15.0% in the prior year period due as the Company continued to drive its sales mix to favor higher-margin, premium products.
U.S. domestic sales to major online outlets continue to expand rapidly, benefiting from recent U.S. tax law changes. 
Anticipate robust sales and earnings growth throughout 2018.
Management Commentary
Tawny Lam, Chief Executive Officer of Nova LifeStyle, commented, "Nova Lifestyle is pleased to announce fantastic first quarter 2018 financial results.  Since the beginning of 2018, Nova LifeStyle’s focus on marketing trendy designed, high-end products in our catalogues has attracted large orders from global customers. Our outstanding financial results are driven by sales increase across nearly all product categories, with online sales continuing to anchor our growth. This was a well-executed quarter with plenty of growth opportunities going forward.” 
 “Nova LifeStyle entered 2018 with strong growth momentum. We have the latest product designs and deeper brand penetration for our popular Diamond Sofa brand. Since the Company was founded nearly 30 years ago, Diamond sofa has continued to innovate with new product offerings. We anticipate significant earnings growth in 2018.”
About Nova LifeStyle
Nova LifeStyle, Inc., a NASDAQ Global Market listed company headquartered in California and founded nearly 30 years ago, is a fast growing, innovative designer and distributor of modern LifeStyle residential and commercial furniture products: 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) 836-9606aprior@equityny.com
NOVA LIFESTYLE, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017 (UNAUDITED)
 
 
 
Three Months Ended March 31,
 
 
2018
 
 
 
2017
 
Net Sales
$
  22,303,472
 
 
$
  18,057,022
 
Cost of Sales
 
  17,401,930
 
 
 
  15,355,247
 
 
 
 
 
Gross Profit
 
  4,901,542
 
 
 
  2,701,775
 
 
 
 
 
Operating Expenses
 
 
 
Selling expenses
 
  631,153
 
 
 
  975,002
 
General and administrative expenses
 
  2,305,673
 
 
 
  3,025,676
 
 
 
 
 
Total Operating Expenses
 
  2,936,826
 
 
 
  4,000,678
 
 
 
 
 
Income (Loss) From Operations
 
  1,964,716
 
 
 
  (1,298,903
)
 
 
 
 
Other Income (Expenses)
 
 
 
Foreign exchange transaction loss
 
  (136
)
 
 
  (40
)
Interest expense, net
 
  (31,582
)
 
 
  (54,406
)
Financial expense
 
  (30,720
)
 
 
  (26,060
)
 
 
 
 
Total Other Expenses, Net
 
  (62,438
)
 
 
  (80,506
)
 
 
 
 
Income (Loss) Before Income Taxes
 
  1,902,278
 
 
 
  (1,379,409
)
Income Tax Expense (Benefit)
 
  247,257
 
 
 
  (170,019
)
 
 
 
 
Net Income (Loss) and Comprehensive Income (Loss)
$
  1,655,021
 
 
$
  (1,209,390
)
 
 
 
 
Basic weighted average shares outstanding
 
  28,253,115
 
 
 
  27,345,106
 
Diluted weighted average shares outstanding
 
  28,693,479
 
 
 
  27,345,106
 
 
 
 
 
Net income (loss) per share of common stock
 
 
 
Basic
$
  0.06
 
 
$
  (0.04
)
Diluted
$
  0.06
 
 
$
  (0.04
)
 
NOVA LIFESTYLE, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2018 (UNAUDITED) AND DECEMBER 31, 2017
 
 
March 31, 2018
 
December 31, 2017
Assets
 
 
 
Current Assets
 
 
 
Cash and cash equivalents
$
  1,121,170
 
$
  5,722,716
Accounts receivable, net
 
  54,625,956
 
 
  54,006,513
Advance to suppliers
 
  10,762,192
 
 
  8,580,609
Inventories
 
  6,220,820
 
 
  6,374,560
Prepaid expenses and other receivables
 
  171,197
 
 
  232,935
Total Current Assets 
 
  72,901,335
 
 
  74,917,333
Noncurrent Assets
 
 
 
Plant, property and equipment, net
 
  158,405
 
 
  157,246
Lease deposit
 
  43,260
 
 
  43,260
Goodwill
 
  218,606
 
 
  218,606
Intangible assets, net
 
  4,100,932
 
 
  4,202,608
Deferred tax asset
 
  318,961
 
 
  318,961
Total Noncurrent Assets
 
  4,840,164
 
 
  4,940,681
Total Assets 
$
  77,741,499
 
$
  79,858,014
 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
Current Liabilities
 
 
 
Accounts payable
$
  1,338,898
 
$
  1,634,554
Advance from customers
 
  43,221
 
 
  19,826
Accrued liabilities and other payables
 
  733,362
 
 
  847,756
Income tax payable
 
  393,861
 
 
  178,307
Total Current Liabilities
 
  2,509,342
 
 
   2,680,443
Noncurrent Liabilities
 
 
 
Line of credit
 
-
 
 
  4,202,118
Income tax payable
 
  4,559,553
 
 
  4,527,849
Total Noncurrent Liabilities
 
  4,559,553
 
 
  8,729,967
Total Liabilities
 
  7,068,895
 
 
  11,410,410
Contingencies and Commitments
 
 
 
Stockholders' Equity
 
 
 
Common stock, $0.001 par value; 75,000,000 shares authorized,
 
 
 
28,301,738 and 27,309,695 shares issued and outstanding;
 
  28,302
 
 
  28,192
as of March 31, 2018 and December 31, 2017, respectively
 
Additional paid-in capital
 
   39,252,246
 
 
  38,682,377
Statutory reserves
 
  6,241
 
 
  6,241
Retained earnings
 
   31,385,815
 
 
  29,730,794
Total Stockholders' Equity
 
  70,672,604
 
 
  68,447,604
Total Liabilities and Stockholders' Equity
$
  77,741,499
 
$
  79,858,014
 
NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017 (UNAUDITED)
 
 
Three Months Ended March 31,
 
 
2018
 
2017
 
 
 
 
Cash Flows From Operating Activities
 
 
 
 
 Net income (loss)
$
1,655,021
 
$
(1,209,390
)
Adjustments to reconcile net income to net cash used inoperating activities:
 
 
 
 
 
 
Depreciation and amortization
 
112,017
 
 
381,119
 
Deferred tax benefit
 
31,704
 
 
(188,117
)
Stock compensation expense
 
595,677
 
 
449,889
 
Termination cost on Academic E-commerce platform (Note 6)
 
--
 
 
800,000
 
Changes in bad debt allowance
 
321,970
 
 
324,684
 
Changes in operating assets and liabilities:
 
 
 
 
 
 
Accounts receivable
 
(941,413
)
 
16,614,186
 
Advance to suppliers
 
(2,181,584
)
 
(7,444,924
)
Inventories
 
153,740
 
 
489,152
 
Other current assets
 
35,452
 
 
112,991
 
Accounts payable
 
(295,656
)
 
(1,458,241
)
Advance from customers
 
23,395
 
 
21,529
 
Accrued liabilities and other payables
 
(113,806
)
 
(151,606
)
Taxes payable
 
215,554
 
 
18,097
 
 
 
 
 
 
 
 
Net Cash (Used in) Provided by Operating Activities
 
(387,929
)
 
8,759,369
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
)
 
 
 
 
 
 
 
Net Cash Used in Investing Activities
 
(11,499
)
 
(7,587,132
)
 
 
 
 
 
 
 
Cash Flows From Financing Activities
 
 
 
 
 
 
 Proceeds from line of credit and bank loan
 
15,923,479
 
 
15,469,342
 
 Repayment to line of credit and bank loan
 
(20,125,597
)
 
(18,939,032
)
 
 
 
 
 
 
 
Net Cash Used in Financing Activities
 
(4,202,118
)
 
(3,469,690
)
 
NOVA LIFESTYLE, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017 (UNAUDITED)
 
 
Three Months Ended March 31, 
 
 2018 
 
 2017 
 
 
 
 
Effect of Exchange Rate Changes on Cash and Cash Equivalents
 
  -
 
 
  -
Net decrease in cash and cash equivalents
 
  (4,601,546)
 
 
  (2,297,453)
Cash and cash equivalents, beginning of period
 
  5,722,716
 
 
  2,587,743
Cash and cash equivalents, end of period
$
  1,121,170
 
$
  290,290
 
 
 
 
Analysis of cash and cash equivalents
 
 
 
Included in cash and cash equivalents per consolidated balance sheets
 
  1,121,170
 
 
  290,290
Cash and cash equivalents, end of period
$
  1,121,170
 
$
  290,290
 
 
 
 
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
 
 
 
 Income tax payments
$
  --
 
$
  --
  Interest paid
$
  31,582
 
$
  54,406

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