LOS ANGELES - Nova LifeStyle, Inc. (nasdaq-gm:'NVFY'), a U.S.-based fast growing, innovative designer and manufacturer of modern LifeStyle furniture, today announced financial results for the fourth quarter and fiscal year ended December 31, 2013.
2013 Accomplishments
Recent 2014 Accomplishments
Tawny Lam, President of Nova LifeStyle, Inc. stated, "2013 was a year of major accomplishments for our Company as we made further progress on our key growth initiatives. Specifically, we continued our innovation as we further incorporated current lifestyle trends into our product offering, introduced NOVA QwiK!, and expanded our product offering of living room and dining room pieces. We expanded our global distribution channels through the acquisition of Bright Swallow, adding complementary product lines and geographical reach, as well as our supply agreement with IKEA and new relationships in England and Australia. We also expanded our production capacity to accommodate current demand for our products as well as to support future growth. We are very excited about the strong growth opportunities that we believe exist for Nova LifeStyle, and I am confident that the investments we made in our business in fiscal 2013 have provided us with a solid foundation, allowing us to execute our long-term growth initiatives and capitalize on those opportunities."
Ms. Lam continued, "In 2014 we remain focused on continued product innovation as well as expanding our presence globally through further penetration of existing channels of distribution and the addition of new ones. This includes the development of our own e-commerce platform aimed at the China market, which we believe will help diversify our customer base and end-user markets, and increase profitability in the long-term. We expect to benefit from many of the new supply agreements we have in place both in the near and the longer-term as well as from initiatives to improve profit margins, and expect to increase our net income in fiscal year 2014 over fiscal 2013. Our recent listing on NASDAQ will also provide us with greater visibility in the investment community as we expand our overall global market presence."
For the fourth quarter ended December 31, 2013:
For the fiscal year ended December 31, 2013:
About Nova LifeStyle, Inc.
Nova LifeStyle, Inc., a NASDAQ Global Markets Exchange listed company headquartered in California, is a fast growing, innovative designer and manufacturer 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 and include LifeStyle brands such as Diamond Sofa, Colorful World, Giorgio Mobili, Nova QwiK, and Bright Swallow International. Nova's products feature urban contemporary styles that integrate comfort and functionality incorporating upscale luxury designs appealing to LifeStyle-conscious middle and upper middle-income consumers in the U.S., China, Europe, and elsewhere in the world. To learn more about Nova LifeStyle, Inc., please visit our website at www.NovaLifeStyle.com .
| NOVA LIFESTYLE, INC. AND SUBSIDIARIES | |||
| 2013 | 2012 | ||
| Assets | |||
| Current Assets | |||
| Cash and cash equivalents | $ 2,323,338 | $ 3,150,492 | |
| Accounts receivable, net | 27,967,831 | 22,387,517 | |
| Advance to suppliers | 3,535,100 | 3,105,584 | |
| Inventories | 3,353,634 | 3,240,721 | |
| Prepaid expenses and other receivables | 648,620 | 179,713 | |
| Income tax receivable | 38,654 | -- | |
| Deferred tax asset | 243,682 | 157,423 | |
| Total Current Assets | 38,110,859 | 32,221,450 | |
| Noncurrent Assets | |||
| Heritage and cultural assets | 132,993 | 129,002 | |
| Plant, property and equipment, net | 13,146,638 | 8,551,114 | |
| Construction in progress | 1,024,645 | 5,374,056 | |
| Acquisition deposit | -- | 3,000,000 | |
| Lease deposit | 103,122 | 43,029 | |
| Goodwill | 1,027,124 | 218,606 | |
| Intangible assets, net | 6,976,991 | 1,216,092 | |
| Deferred tax asset, net | 44,334 | -- | |
| Total Noncurrent Assets | 22,455,847 | 18,531,899 | |
| Total Assets | $ 60,566,706 | $ 50,753,349 | |
| Liabilities and Stockholders' Equity | |||
| Current Liabilities | |||
| Accounts payable | $ 6,895,254 | $ 7,123,534 | |
| Line of credit | 820,089 | 6,529,178 | |
| Advance from customers | 43,077 | 257,191 | |
| Accrued liabilities and other payables | 1,458,157 | 1,495,835 | |
| Taxes payable | - | 272,159 | |
| Total Current Liabilities | 9,216,577 | 15,677,897 | |
| Noncurrent Liabilities | |||
| Line of credit | 6,602,258 | - | |
| Deferred rent payable | 74,152 | 55,902 | |
| Deferred tax liability, net | -- | 45,370 | |
| Income tax payable | 5,944,424 | 4,608,592 | |
| Total Noncurrent Liabilities | 12,620,834 | 4,709,864 | |
| Total Liabilities | 21,837,411 | 20,387,761 | |
| Contingencies and Commitments | |||
| Stockholders' Equity | |||
| Common stock, $0.001 par value; 75,000,000 shares authorized, 19,206,024 and 18,536,567 shares issued and outstanding as of December 31, 2013 and 2012 | 19,206 | 18,537 | |
| Additional paid-in capital | 20,977,058 | 19,107,845 | |
| Subscription receivable | (750,000) | (1,950,000) | |
| Statutory reserves | 6,241 | 6,241 | |
| Accumulated other comprehensive income | 2,603,010 | 2,176,646 | |
| Retained earnings | 15,873,780 | 11,006,319 | |
| Total Stockholders' Equity | 38,729,295 | 30,365,588 | |
| Total Liabilities and Stockholders' Equity | $ 60,566,706 | $ 50,753,349 | |
| NOVA LIFESTYLE, INC. AND SUBSIDIARIES | ||||
| Years Ended December 31, | ||||
| 2013 | 2012 | |||
| Net Sales | $ 78,356,493 | $ 66,297,498 | ||
| Cost of Sales | 62,990,736 | 51,572,076 | ||
| Gross Profit | 15,365,757 | 14,725,422 | ||
| Operating Expenses | ||||
| Selling expenses | 3,345,903 | 3,158,191 | ||
| General and administrative expenses | 5,921,091 | 4,788,947 | ||
| Loss on disposal of plant, property and equipment | 37,879 | 123,675 | ||
| Total Operating Expenses | 9,304,873 | 8,070,813 | ||
| Income From Operations | 6,060,884 | 6,654,609 | ||
| Other Income (Expenses) | ||||
| Non-operating expense | (217,221) | 50,915 | ||
| Foreign exchange transaction gain | (71,296) | 47 | ||
| Interest expense | (292,291) | (188,868) | ||
| Financial expense | (13,273) | (11,166) | ||
| Total Other Expenses, Net | (594,081) | (149,072) | ||
| Income Before Income Tax | 5,466,803 | 6,505,537 | ||
| Income Tax Expense | 599,342 | 1,071,654 | ||
| Net Income | 4,867,461 | 5,433,883 | ||
| Other Comprehensive Income | ||||
| Foreign currency translation | 426,364 | 37,672 | ||
| Comprehensive Income | $ 5,293,825 | $ 5,471,555 | ||
| Basic weighted average shares outstanding | 18,876,052 | 18,530,591 | ||
| Diluted weighted average shares outstanding | 19,122,386 | 18,681,448 | ||
| Basic net earnings per share | $ 0.26 | $ 0.29 | ||
| Diluted net earnings per share | $ 0.25 | $ 0.29 | ||
| NOVA LIFESTYLE, INC. AND SUBSIDIARIES | |||
| 2013 | 2012 | ||
| Cash Flows From Operating Activities | |||
| Net Income | $ 4,867,461 | $ 5,433,883 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation and amortization | 1,324,881 | 764,596 | |
| Deferred tax expense (benefit) | (171,938) | 163,370 | |
| Stock compensation expense | 581,640 | 57,292 | |
| Warrants expense | 76,629 | -- | |
| Loss on fixed assets disposal | 37,879 | 123,675 | |
| Bad debt allowance | 52,188 | 225,897 | |
| Changes in operating assets and liabilities: | |||
| Accounts receivable | (3,155,909) | (3,624,756) | |
| Accounts receivable - related party | -- | 28,289 | |
| Advance to suppliers | (411,706) | (2,753,569) | |
| Inventories | (53,035) | (1,386,750) | |
| Other current assets | (106,268) | (32,900) | |
| Accounts payable | (3,008,918) | 351,846 | |
| Advance from customers | (216,523) | 165,291 | |
| Accrued expenses and other payables | (181,904) | 658,371 | |
| Deferred rent payable | 16,209 | (3,178) | |
| Taxes payable | 392,076 | 655,505 | |
| Net Cash Provided by Operating Activities | 42,762 | 826,862 | |
| Cash Flows From Investing Activities | |||
| Deposit on acquisition of Bright Swallow Int'l Group Ltd. | -- | (3,000,000) | |
| Acquisition of Bright Swallow | (3,500,000) | -- | |
| Cash acquired from acquisition of Bright Swallow | 342,029 | -- | |
| Cash received from fixed assets disposal | 1,350 | 8,363 | |
| Acquisition of intangible asset | -- | (538,614) | |
| Purchase of property and equipment | (502,081) | (651,805) | |
| Construction in progress | (317,252) | (4,626,107) | |
| Net Cash Used in Investing Activities | (3,975,954) | (8,808,163) | |
| Cash Flows From Financing Activities | |||
| Repayment to related parties | (1,987) | -- | |
| Proceeds from subscription receivable | 1,200,000 | -- | |
| Proceed from line of credit and bank loan | 18,344,000 | 6,522,139 | |
| Repayment to line of credit and bank loan | (17,485,192) | -- | |
| Cash proceeds from private placement, net | -- | 1,753,849 | |
| Due from factor | -- | 203,351 | |
| Cash received from warrants exercised | 1,021,614 | 142,600 | |
| Net Cash Provided by Financing Activities | $ 3,078,435 | $ 8,621,939 | |
| Effect of Exchange Rate Changes on Cash and Cash Equivalents | |||
| Net (decrease) / increase in cash and cash equivalents | (827,154) | 645,313 | |
| Cash and cash equivalents, beginning of year | 3,150,492 | 2,505,179 | |
| Cash and cash equivalents, ending of year | $ 2,323,338 | $ 3,150,492 | |
| Supplemental Disclosure of Cash Flow Information | |||
| Cash paid during the year for: | |||
| Income tax payments | $ 364,053 | $ 269,316 | |
| Interest expense | $ 267,019 | $ 121,403 | |
| Supplemental Disclosure of Non-Cash Financing Activities | |||
| Construction deposit transfer to construction in progress | $ -- | $ 633,212 | |
| Construction in progress transfer to fixed assets | $ 4,747,665 | $ -- | |
Source: Nova LifeStyle, Inc.
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