LOS ANGELES, Nov. 20, 2020 (GLOBE NEWSWIRE) -- Nova LifeStyle, Inc. (NVFY) - Get Report ("Nova LifeStyle" or the "Company") today announced its financial results for the third quarter ended September 30, 2020.
Key Financial Highlights:
Operating Results for the Three Months Ended September 30, 2020
- Net sales for the three months ended September 30, 2020 were $3.3 million, as compared to $7.7 million in the same period of 2019.
- Cost of sales for the three months ended September 30, 2020 were $9.9 million, as compared to $6.1 million in the same period of 2019. Cost of sales includes a write down of $7.77 million of our slow-moving inventory, primarily Jade mats in Malaysia, to the lower of cost and net realizable value in the third quarter of 2020.
- Loss from operations for the three months ended September 30, 2020 was $8.2 million, as compared to $272 thousand in the same period in 2019.
Operating Results for the Nine Months Ended September 30, 2020
- Net sales for the nine month period ended September 30, 2020 were $7.8 million, compared to $19.5 million in the same period 2019.
- Cost of sales for the nine month period ended September 30, 2020 were $12.8 million, compared to $15.3 million in the same period of 2019. Cost of sales includes a write down of $7.77 million of our slow-moving inventory, primarily Jade mats in Malaysia, to the lower of cost and net realizable value in the third quarter of 2020.
- Loss from operations for the nine months ended September 30, 2020 was $9.6 million, compared to $1.4 million in the same period in 2019.
At September 30, 2020, our cash and cash equivalents balance was $9.4 million.
On August 28, 2020, Malaysia government extended the shutdown order to all business until December 31, 2020. The Company is continuing to experience reduced demand for its products and an increased level of purchase order cancellations as a result of the COVID-19 pandemic. Products shipped from Asia have experienced significant delays as well as an increase in costs of shipping since the onset of the pandemic. We may experience shipping disruptions in the future. Finally, the Company expects that the impact of the COVID-19 outbreak on the United States and world economies will continue to have a material adverse impact on the demand for its products.
Tawny Lam, Chairperson and Chief Executive Officer of Nova LifeStyle, stated, "The impact of COVID-19 continues to pose challenges for our supply chain and retailers on a global basis. In the most recently completed fiscal quarter, we experienced a decline in sales due to our customers' closing their retail stores, temporarily or otherwise. Nevertheless, we believe that our focus on liquidity over the past several years has allowed us to build a sustainable liquidity position to navigate the current COVID-19 environment. We are executing our transformation plan and believe higher margin furniture lines are repositioning the Company for long-term success. While the uncertainty in our operating environment persists and will continue to do so in the foreseeable future, we will continue executing on our strategy to sustain our business."
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, jade mats 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.
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