Nova LifeStyle, Inc. Reports 2020 Second Quarter Results
August 14 2020 - 4:01PM
Nova LifeStyle, Inc. (NASDAQ: NVFY) (“Nova LifeStyle” or the
“Company”) today announced its financial results for the second
quarter ended June 30, 2020.
Key Financial Highlights:
Operating Results for the Three Months Ended June 30, 2020
- Net sales for three months ended June 30, 2020 were $2.3
million, a decrease of 23% from $3.0 million in the same period of
2019.
- Cost of sales from continuing operations were $1.42 million in
the three months ended June 30, 2020, a decrease of 35% from $2.18
million in the same period of 2019. Cost of sales as a percentage
of sales decreased to 62% in the three months ended June 30, 2020,
compared to 73% in 2019.
- Gross profit from continuing operations increased by 9% to
$0.87 million in the three months ended June 30, 2020, compared to
$0.8 million in the same period in 2019. Our gross profit margin
increased to 38% in the three months ended June 30, 2020, compared
to 27% in the same period of 2019. The increase in gross profit
margin is attributable to our selling new products at a higher
margin.
- Net loss from continuing operations for the three months ended
June 30, 2020 was $515,302, as compared to $1,142,095 in the same
period of 2019.
Operating Results for the Six Months Ended June 30, 2020
- Net sales for the six month period ended June 30, 2020 were
$4.5 million, a decrease of 62% from $11.8 million in the same
period 2019.
- Cost of sales from continuing operations were $2.85 million in
the six months ended June 30, 2020, a decrease of 69% from $9.16
million in the same period of 2019. Cost of sales as a percentage
of sales decreased to 63% in the six months ended June 30, 2020,
compared to 78% in the same period of 2019.
- Gross profit from continuing operations decreased by 37% to
$1.65 million in the six months ended June 30, 2020, compared to
$2.61 million in 2019. Our gross profit margin increased to 37% in
the six months ended June 30, 2020, compared to 22% in the same
period of 2019. The increase in gross profit margin is attributable
to our success in selling new products at a higher
margin.
- Net loss from continuing operations for the six month period
ended June 30, 2020 was $1.5 million, as compared to $1.4 million
in the same period of 2019.
Tawny Lam, Chairperson and Chief Executive Officer of Nova
LifeStyle, stated, “The COVID-19 pandemic adversely impacted our
operating results during the first half of 2020 by substantially
reducing our net sales. Notwithstanding the impact of the pandemic,
we enjoyed a substantially increased gross profit margin, which we
believe demonstrates market acceptance of our new product offerings
and the success of the strategy we implemented in 2019 to shift our
focus to the marketing of new higher-margin product lines. We
expect to be well-positioned to increase our net sales and attain
profitability as the pandemic abates.”
Some of our customers, which had suspended or severely curtailed
operations in response to the pandemic, have resumed
operations; and we are working with them, our manufacturers and our
shipping providers in an attempt to assure that we are in a
position to satisfy our customers’ needs as our customers work to
ramp up operations to pre-pandemic levels.”
Moreover, during these trying times when so many businesses are
suffering from the substantial impacts on their working capital
caused by the pandemic, we continue to enjoy a strong balance
sheet. At June 30, 2020, our cash and cash equivalents balance was
$9,470,891, and our working capital (current assets minus current
liabilities) was $65,223,270. Thus, we are in a strong position to
capitalize from increases in market demand that we anticipate once
the pandemic abates.”
“We continue to focus on expanding our sales channels and
preparing our sales and marketing departments for future
opportunities. Even though there is significant uncertainty, we are
beginning to see signs of a potential rebound in the latter part of
the year,” concluded Ms. Lam.
About Nova LifeStyle
Nova LifeStyle, Inc. is a well-established, innovative designer
and distributor of modern lifestyle furniture; primarily sofas,
dining room furniture, cabinets, office furniture and related
components, bedroom furniture, and various accessories, in matching
collections. Nova LifeStyle’s product lines include the Nova Brands
and Diamond Sofa (www.diamondsofa.com). Nova's products feature
urban contemporary styles that integrate comfort and functionality,
incorporating upscale luxury designs which appeal to middle and
upper middle-income consumers in the USA, China, Europe, and
elsewhere in the world.
Visit Nova LifeStyle's website at www.NovaLifeStyle.com.
Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, including, among others, our ability to fully resume our
operations and remain financially healthy, our expected future
growth prospects. All statements other than statements of
historical fact are, or may be deemed to be, forward-looking
statements. In some cases, forward-looking statements can be
identified by the use of forward-looking terms such as
“anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,”
“may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,”
“objective,” “projection,” “forecast,” “goal,” “guidance,”
“outlook,” “effort,” “target,” “trajectory,” “focus,” “work
to,” “attempt,” “pursue,” or the negative of these terms or other
comparable terms. However, the absence of these words does not mean
that the statements are not forward-looking. These forward-looking
statements are based on certain assumptions and analyses made by us
in light of our experience and our perception of historical trends,
current conditions and expected future developments, as well as
other factors we believe are appropriate in the circumstances.
Investor Relations
Contact
Andrew Barwicki
516-662-9461
andrew@barwicki.com
ir@novalifestyle.com
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