Nova LifeStyle Announces First Quarter Financial Results
14 Mai 2018 - 1:45PM
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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