COMMERCE, CA - Nova LifeStyle Inc., a manufacturer and global distributor of urban contemporary furniture, reported that sales for its third quarter grew 72% to $19.2 million compared to the third quarter of 2011.
In spite of the sales spike, the company said its third quarter profit declined 26.2% from $1.68 million in 2011 to $1.24 million this year. Nova LifeStyle offered the following explanation for its smaller year-to-year profit: "(k)eeping pace with strong global demand required utilization of higher cost third-party manufacturers."
Nova LifeStyle's latest earnings report came fresh on the heels of its announcement that it had completed construction of a factory in China to manufacture furnture for IKEA.
Nova LifeStyle said it achieved triple-digit growth for furniture sales in the United States and double-digit gains in Europe and China.
Tawny Lam, president of Nova LifeStyle, and a co-founder of Diamond Sofa, a Nova LifeStyle brand in the U.S., said, "While never fully satisfied, we are pleased with our progress thus far this year, in particular the strong growth and excitement generated by our contemporary furniture brands in the U.S. and around the world... We remain very comfortable about achieving our growth goals for the year, which are full year sales growing to between $50 million and $58 million (mid-range:+25%) from $43.2 million in 2011, and net income increasing to between $7 million and $8 million (midrange:+39%) from $5.4 million last year."
Jeffrey Wong, CEO, chairman and co-founder of Nova LIfeStyle, said, "Looking ahead we already have in place a very strong foundation for continuing gains in 2013. In particular, this includes the planned start up by year end of production for IKEA in our new 161,460-square-foot production line adjacent to our existing factory. As previously announced, we believe this will generate between $20 million and $25 million in new sales in 2013. In addition, we recently announced our first shipment of "Made in the USA" luxury natural latex mattresses to selected franchise stores in China... (We) will remain focused on other "Made in the USA" products we can sell in China where the possibilities really are unlimited and we have a jump on competition with our own growing distribution network in place."
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