LOS ANGELES - Nova LifeStyle, Inc. (NASDAQ-GM: NVFY), a U.S.-based fast-growing, innovative designer, manufacturer and distributor of modern LifeStyle furniture, today announced financial results for the first quarter ended March 31, 2015.

First Quarter 2015 Corporate and Financial Highlights:

•Net sales were $22.0 million, an increase of 23% compared to the prior year period.

•Gross profit was $4.1 million, an increase of 25% compared to the prior year period. Gross margin remained at 18%, in line with the prior year period.

•Net income was $1.6 million, or $0.08 per diluted share, compared to $0.3 million or $0.02 per diluted share in the prior year period.

•Repeat purchase orders secured from Nebraska Furniture Mart, a Berkshire Hathaway Company in the U.S.,

•Four additional SKUs added to production agreement with IKEA China.

"We entered 2015 on a solid footing with the launch of our newest luxury furniture collection, which has a unique and elegant design without compromising on comfort," commented Jeffrey Wong, CEO of Nova LifeStyle. "The improved results in the first quarter were driven by success in both North American and Asian markets, where we have significantly intensified our marketing efforts resulting in more direct sales and a diversified customer base. In addition to securing new customers, we made several repeat sales to major, reputable distributors, demonstrating continued demand for our high quality and stylish furniture products and reaffirming our confidence in our strategy to target the growing global middle class," concluded Mr. Wong.

Corporate update for the first quarter ended March 31, 2015:

North America

The Company continued to execute on its growth initiative to increase sales in North America. Sales to North America were $15.12 million in the three months ended March 31, 2015, an increase of 34.6% from $11.23 million in the same period of 2014, driven by increased marketing efforts in the U.S. markets.

During the first quarter 2015, Nova LifeStyle secured additional purchase orders from Nebraska Furniture Mart, an Omaha-based subsidiary of Berkshire Hathaway Inc., to supply furniture to Grandscape in Dallas, Texas. Grandscape is a new real estate development expected to open in the spring of 2015. The development will cover 90 acres, with a 560,000 sq. ft. retail furniture and home wears showroom and a 1.3 million sq. ft. distribution center. Grandscape is expected to attract 8 million visitors its first year.

North America remains Nova LifeStyle's largest, and fastest growing, market.

China and other parts of Asia

In China, overall sales increased by 22.5% to $3.8 million in the three months ended March 31, 2015, as compared to $3.1 million in the same period of 2014.

During the first quarter 2015, Nova LifeStyle secured an agreement with IKEA, the privately owned Swedish furniture seller, to add four additional SKUs to its existing production to continue to supply its China stores. The target for the initial shipment of the four new SKUs is in the second quarter of this year with an estimate of $4-6M in revenue for these SKUs for the first full year of production. IKEA, the world's largest furniture chain with global sales estimated at over $38bn annually, owns and operates 350 stores in 43 countries with eight of IKEA's 10 largest stores located in China.

The Company's sales to other parts of Asia Pacific, including Hong Kong, Australia, and other countries, increased 9.9% to $0.73 million in the three months ended March 31, 2015, as compared to $0.66 million in the same period of 2014.

Europe

Sales to Europe were $2.42 million in the three months ended March 31, 2015, a decrease of 17% from $2.91 million in the same period of 2014 as a result of the slow European economy.

Results for the Fiscal First Quarter Ended March 31, 2015

Net sales for the three months ended March 31, 2015, were $22.03 million, an increase of 23% from $17.88 million in the same period of 2014; this increase in net sales resulted primarily from a 33% increase in average selling price with a 13% decrease in sales volume.

Gross profit increased 25.02% to $4.07 million in the three months ended March 31, 2015, compared to $3.25 million in the same period of 2014. The increase in gross profit resulted primarily from increase of net sales. Gross profit margin remained flat at18% in the three months ended March 31, 2015, compared with the same period of 2014.

Operating income was $0.9 million, compared to $0.55 million in the same period of 2014.

Other income was $925,785 in the three months ended March 31, 2015, compared with other expenses of $78,664 in the same period of 2014, an increase of $1,004,449. The increase in other income was due primarily to change in fair value of warrant liability of $972,645.

Net income was $1.62 million in the three months ended March 31, 2015, an increase of 435% from $0.30 million for the same period of 2014. Net profit margin was 7% in the three months ended March 31, 2015, an increase of 5% from 2% for the same period of 2014. The increase in profit margin resulted primarily from income from the change in fair value of warrant liability, which is a non-cash and non-taxable income.

Cash and cash equivalents were $1.32 million at March 31, 2015, as compared to $1.24 million as of December 31, 2014.

About Nova LifeStyle, Inc.

Nova LifeStyle, Inc., a NASDAQ Global Markets Exchange listed company headquartered in California, is a fast growing, innovative designer, manufacturer 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 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 or download the NVFY IRapp from the investor page.

NOVA LIFESTYLE, INC. AND SUBSIDIARIES  

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014

Three Months Ended March 31,

2015

2014

 (Unaudited)

 (Unaudited)

Net Sales

$             22,032,478

$           17,882,892

Cost of Sales

17,965,725

14,630,017

Gross Profit

4,066,753

3,252,875

18%

18%

Operating Expenses

Selling expenses

1,265,856

735,345

General and administrative expenses

1,905,610

1,962,629

Total Operating Expenses

3,171,466

2,697,974

Income From Operations

895,287

554,901

Other Income (Expenses)

Non-operating income, net

29,576

19,658

Foreign exchange transaction income

6,328

--

Change in fair value of warrant liability

972,645

--

Interest expense

(63,681)

(63,451)

Financial expense

(19,083)

(34,871)

Total Other Income (Expenses), Net

925,785

(78,664)

Income Before Income Tax

1,821,072

476,237

Income Tax Expense

196,209

172,685

Net Income

1,624,863

303,552

Other Comprehensive Income

Foreign currency translation

(68,658)

(131,499)

Comprehensive Income

$               1,556,205

$                172,053

Basic weighted average shares outstanding

20,912,582

19,348,479

Diluted weighted average shares outstanding

20,912,582

19,548,665

Basic net earnings per share

$                        0.08

$                      0.02

Diluted net earnings per share

$                        0.08

$                      0.02

 

NOVA LIFESTYLE, INC. AND SUBSIDIARIES  

CONDENSED CONSOLIDATED BALANCE SHEETS

MARCH 31, 2015 (UNAUDITED) AND DECEMBER 31, 2014

March 31,

December 31,

2015

2014

Assets

Current Assets

Cash and cash equivalents

$            1,318,398

$              1,244,308

Accounts receivable, net

42,541,749

42,971,510

Advance to suppliers

5,865,449

8,104,312

Inventories

5,870,234

3,612,868

Prepaid expenses and other receivables

447,066

641,208

Deferred tax asset

118,655

118,866

Total Current Assets     

56,161,551

56,693,072

Noncurrent Assets

   Heritage and cultural assets

132,012

132,513

Plant, property and equipment, net

14,300,274

14,377,909

Construction in progress

1,488,712

1,378,860

Lease deposit

97,151

96,096

Deposits for equipment and factory construction

1,264,459

1,264,551

Goodwill

218,606

218,606

Intangible assets, net

6,562,230

6,493,726

Total Noncurrent Assets

24,063,444

23,962,261

Total Assets     

$          80,224,995

$            80,655,333

NOVA LIFESTYLE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

MARCH 31, 2015 (UNAUDITED) AND DECEMBER 31, 2014

March 31,

December 31,

2015

2014

Liabilities and Stockholders' Equity

Current Liabilities

Accounts payable

$            8,769,745

$            10,454,485

Line of credit

8,374,908

7,592,879

Advance from customers

135,626

123,673

Accrued liabilities and other payables

1,880,935

2,470,284

Warrant derivative liability

492,374

1,465,019

Taxes payable

101,316

61,769

Total Current Liabilities

19,754,904

22,168,109

Noncurrent Liabilities

Deferred rent payable

89,693

85,077

Deferred tax liability

12,359

12,199

Income tax payable

6,711,880

6,607,739

Total Noncurrent Liabilities

6,813,932

6,705,015

Total Liabilities

26,568,836

28,873,124

Contingencies and Commitments

Stockholders' Equity

Common stock, $0.001 par value; 75,000,000 shares authorized, 20,975,316 and 20,897,316 shares issued and outstanding as of March 31, 2015 and December 31, 2014

20,975

20,897

Additional paid-in capital

25,069,143

24,751,476

Statutory reserves

6,241

6,241

Accumulated other comprehensive income

2,506,509

2,575,167

Retained earnings

26,053,291

24,428,428

Total Stockholders' Equity

53,656,159

51,782,209

Total Liabilities and Stockholders' Equity

$          80,224,995

$            80,655,333

-

-

 

 

Source: Nova LifeStyle, Inc.

Have something to say? Share your thoughts with us in the comments below.