LOS ANGELES, March 26, 2015 /PRNewswire/ -- 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 year ended
December 31, 2014.
Fiscal Year Ended December 31, 2014 Financial
Highlights
- Net sales were $98.7 million, an
increase of 26% compared to the prior year period. Growth was
primarily driven by a 46% increase in sales in North America and a 14% increase in sales in
Asia Pacific and other countries,
and was partially offset by a 20% decline in sales in Europe.
- Gross profit was $19.4 million,
an increase of 26% compared to the prior year period. Gross margin
remained at 20%, in line with the prior year period.
- Net income was $8.6 million, or
$0.42 per diluted share, based on a
weighted average diluted share count of 20.5 million shares,
compared to $4.9 million or
$0.25 per diluted share in the prior
year period.
- In January 2014, the Company
commenced trading on the NASDAQ under the symbol NVFY.
- In April 2014, the Company
completed an $8.95 million registered
direct placement of common stock.
Fiscal Year Ended December 31, 2014 Corporate
Highlights and Progress on Growth Initiatives
North America
Nova LifeStyle's largest market is North America, contributing $64.39 million in sales in 2014, or 65% of
revenues. North American sales increased 46% year-over-year as a
result of the Company's marketing efforts in the United States and the integration of the
operations of Bright Swallow in Canada.
Nova LifeStyle increased sales of its Diamond Sofa brand through
partnerships with major U.S. retailers; in particular, the Company
formed a partnership with Nebraska Furniture Mart, a Berkshire
Hathaway Company and the largest home furnishings store in
North America, which has recently
resulted in repeat purchase orders to supply furniture to
Grandscape in Dallas, Texas. The Company also commenced
sales of its latest Apricot collection at the grand opening of the
El Dorado furniture store, a top
50 U.S. furniture store.
Nova LifeStyle has also experienced an increase in online sales
in the U.S. via the third-party shopping portal Wayfair.com.
China and other parts of
Asia
In China, overall sales
increased by 6% to $17.0 million for
the year 2014, as compared to $16.0
million in 2013. Throughout 2014, Nova LifeStyle implemented
strategic initiatives to expand sales and distribution in
China, a key growth market. Higher
sales were generated by the opening of seven new franchise stores
and through agreements, such as the one to furnish Ping An
Insurance Group's expansive offices.
The Company achieved significant milestones in its efforts to
increase distribution by increasing online sales via Alibaba's B2C
sites, TMall and JD.com. Nova LifeStyle also signed a franchise
partnership contract with the Ablejoy Company of China, to provide Nova products to their
network of over 200 retail stores. Nova LifeStyle initiated
shipping to Ablejoy in the third quarter of 2014 and will continue
to supply current and future franchise stores. Furthermore, the
Company successfully began manufacturing and shipping to IKEA
China, in accordance with IKEA's strict partnership standards.
The Company's sales to other parts of Asia Pacific, including Hong Kong, Australia, and other countries, increased 46%
to $5.89 million in 2014, compared to
$4.05 million in 2013.
Europe and the
Middle East
European sales decreased year-over-year as a
slower-than-expected recovery impacted growth in the
region.
In 2014, the Company made its entrance into Dubai, U.A.E., as it entered into a continuous
supply agreement with Home Center LLC, a leading furniture and home
furnishings retailer.
Business Outlook
The Company expects the China
and U.S. markets to contribute to top-line growth and generate
higher margins as manufacturing ramps up to meet increasing demand.
The Company expects to focus on increasing the sales volume of
collections already developed during 2014 in both the U.S. and
international markets, rather than developing new
collections.
The process of developing and marketing products for
international markets has enabled Nova LifeStyle to develop the
scale, logistics, marketing, manufacturing efficiencies and design
expertise that will permit the Company to expand aggressively into
the highly attractive U.S., Canadian and Chinese markets.
In Europe, the Company
anticipates an increase in sales and marketing as the region's
economic outlook improves.
"We are very pleased by these improved results as the positive
impact from our strategic growth initiatives takes hold," commented
Jeffrey Wong, CEO of Nova
LifeStyle. "The U.S. remains our largest market and we remain
committed to increasing brand recognition and building
relationships with major reputable distributors across the country.
This year we achieved some major accomplishments in that area and
we look forward to building on these foundations and generating
more momentum as we grow.
"Sales in Asia also increased
significantly and we view the supply agreement with IKEA China as a
testament to the quality of our products and manufacturing
capabilities. We are witnessing the expansion of the retail
furniture market in China as the
growing middle class, increasing urbanization and increased
consumer spending fuel higher demand for household goods and
furniture. Due to our efforts in 2014, we believe that Nova
LifeStyle is well positioned to take full advantage of any upturns
in the global economy, both in Asia and in the domestic market," concluded
Jeffrey Wong, CEO.
Results for the Fiscal Year Ended December 31, 2014
Net sales for the year ended December 31,
2014, were $98.71 million, an
increase of 26% from $78.36 million
in 2013; this increase in net sales resulted primarily from a 32%
increase in sales volume due to a 6% decrease in average selling
price.
Gross profit increased by 26.2% to $19.39
million for the year ended December
31, 2014, compared to $15.37
million in 2013. The increase in gross profit resulted
primarily from an increase in net sales. Gross profit margin
remained flat at 20% for the year ended December 31, 2014, compared with the prior
year.
Operating income was $5.25
million, compared to $6.06
million in the prior year period.
Net income was $8.55 million in
the year ended December 31, 2014, an
increase of 76% from $4.87 million
for 2013. Net profit margin was 9% in the year ended December 31, 2014, an increase of 3% above the 6%
net profit margin for 2013. The increase in profit margin resulted
primarily from income resulting from the change in fair value of
warrant liability, which is a non-cash and non-taxable
income.
Cash and cash equivalents were $1.2
million at December 31,
2014.
Conference Call
Nova LifeStyle management will host a conference call to discuss
the financial results at 8:30 a.m.
ET/ 5:30 a.m. PT today,
Thursday, March 26, 2015.
Investors in the U.S. interested in participating in the call
should dial 1-888-395-3227 and reference passcode 2875215. Those
calling from outside the U.S. should dial 1-719-325-2495 and
reference passcode 2875215. A telephone replay will be available
approximately three hours after the call until April 9, 2015, by dialing 1-877-870-5176 from the
U.S. or 1-858-384-5517 from international locations, with passcode
2875215.
A simultaneous live webcast will be available on the Investor
Relations section of the Company's website at
www.novalifestyle.com/investor-relations and on the Company's
Investor Relations mobile app, powered by theIRapp™. The webcast
will be archived on the Company's website for one year.
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.
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.
Investor Contact:
KCSA Strategic Communication
Julie Silber
Tel: (310) 766-9760
jsilber@kcsa.com
NOVA LIFESTYLE,
INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
|
FOR THE YEARS
ENDED DECEMBER 31, 2014 AND 2013
|
|
|
|
|
|
Years Ended
December 31,
|
|
2014
|
|
2013
|
|
|
|
|
|
|
Net
Sales
|
$
98,711,275
|
|
$
78,356,493
|
|
|
|
|
Cost of
Sales
|
79,319,418
|
|
62,990,736
|
|
|
|
|
Gross
Profit
|
19,391,857
|
|
15,365,757
|
|
|
|
|
Operating
Expenses
|
|
|
|
Selling
expenses
|
5,477,132
|
|
3,345,903
|
General and
administrative expenses
|
7,823,767
|
|
5,921,091
|
Goodwill
impairment
|
808,518
|
|
--
|
Loss on disposal fixed assets
|
31,727
|
|
37,879
|
|
|
|
|
Total Operating
Expenses
|
14,141,144
|
|
9,304,873
|
|
|
|
|
Income From
Operations
|
5,250,713
|
|
6,060,884
|
|
|
|
|
Other Income
(Expenses)
|
|
|
|
Non-operating income
(expenses), net
|
241,189
|
|
(217,221)
|
Foreign exchange
transaction income (loss)
|
48,183
|
|
(71,296)
|
Change in fair value
of warrant liability
|
4,194,847
|
|
--
|
Interest
expense
|
(158,336)
|
|
(292,291)
|
Financial income
(expense)
|
(41,212)
|
|
(13,273)
|
|
|
|
|
Total Other Income
(Expenses), Net
|
4,284,671
|
|
(594,081)
|
|
|
|
|
Income Before
Income Tax
|
9,535,384
|
|
5,466,803
|
|
|
|
|
Income Tax
Expense
|
980,736
|
|
599,342
|
|
|
|
|
Net
Income
|
8,554,648
|
|
4,867,461
|
|
|
|
|
Other
Comprehensive Income
|
|
|
|
Foreign currency
translation
|
(27,843)
|
|
426,364
|
|
|
|
|
Comprehensive
Income
|
$
8,526,805
|
|
$
5,293,825
|
|
|
|
|
Basic weighted
average shares outstanding
|
20,381,934
|
|
18,876,052
|
Diluted weighted
average shares outstanding
|
20,470,258
|
|
19,122,386
|
|
|
|
|
Basic net earnings
per share
|
$
0.42
|
|
$
0.26
|
Diluted net earnings
per share
|
$
0.42
|
|
$
0.25
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
DECEMBER 31, 2014
AND 2013
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
2013
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
1,244,308
|
|
$
2,323,338
|
Accounts receivable,
net
|
42,971,510
|
|
27,967,831
|
Advance to
suppliers
|
8,104,312
|
|
3,535,100
|
Inventories
|
3,612,868
|
|
3,353,634
|
Prepaid expenses and
other receivables
|
641,208
|
|
648,620
|
Income tax
receivable
|
--
|
|
38,654
|
Deferred tax
asset
|
118,866
|
|
243,682
|
|
|
|
|
Total Current
Assets
|
56,693,072
|
|
38,110,859
|
|
|
|
|
Noncurrent
Assets
|
|
|
|
Heritage
and cultural assets
|
132,513
|
|
132,993
|
Plant, property and
equipment, net
|
14,377,909
|
|
13,146,638
|
Construction in
progress
|
1,378,860
|
|
1,024,645
|
Lease
deposit
|
96,096
|
|
103,122
|
Deposits
|
1,264,551
|
|
--
|
Goodwill
|
218,606
|
|
1,027,124
|
Intangible assets,
net
|
6,493,726
|
|
6,976,991
|
Deferred tax asset, net
|
--
|
|
44,334
|
|
|
|
|
Total Noncurrent
Assets
|
23,962,261
|
|
22,455,847
|
|
|
|
|
Total
Assets
|
$
80,655,333
|
|
$
60,566,706
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
DECEMBER 31, 2014
AND 2013
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
2013
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
payable
|
$
10,454,485
|
|
$
6,895,254
|
Line of
credit
|
7,592,879
|
|
820,089
|
Advance from
customers
|
123,673
|
|
43,077
|
Accrued liabilities
and other payables
|
2,470,284
|
|
1,458,157
|
Warrant derivative
liability
|
1,465,019
|
|
--
|
Taxes
payable
|
61,769
|
|
--
|
|
|
|
|
Total Current
Liabilities
|
22,168,109
|
|
9,216,577
|
|
|
|
|
Noncurrent
Liabilities
|
|
|
|
Line of credit
|
--
|
|
6,602,258
|
Deferred rent
payable
|
85,077
|
|
74,152
|
Deferred tax
liability
|
12,199
|
|
--
|
Income tax
payable
|
6,607,739
|
|
5,944,424
|
|
|
|
|
Total Noncurrent
Liabilities
|
6,705,015
|
|
12,620,834
|
|
|
|
|
Total
Liabilities
|
28,873,124
|
|
21,837,411
|
|
|
|
|
Contingencies and
Commitments
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
Common stock, $0.001
par value; 75,000,000 shares authorized,
|
|
|
|
20,897,316 and
19,206,024 shares issued and outstanding
|
20,897
|
|
19,206
|
as of December 31,
2014 and 2013
|
|
Additional paid-in
capital
|
24,751,476
|
|
20,977,058
|
Subscription
receivable
|
--
|
|
(750,000)
|
Statutory
reserves
|
6,241
|
|
6,241
|
Accumulated other
comprehensive income
|
2,575,167
|
|
2,603,010
|
Retained
earnings
|
24,428,428
|
|
15,873,780
|
|
|
|
|
Total
Stockholders' Equity
|
51,782,209
|
|
38,729,295
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
$
80,655,333
|
|
$
60,566,706
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nova-lifestyle-reports-year-end-2014-results-300056428.html
SOURCE Nova LifeStyle, Inc.