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LOS ANGELES, Aug. 14, 2020 (GLOBE NEWSWIRE) -- 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.
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.