Nova LifeStyle Reports Third Quarter 2016 Financial Results

LOS ANGELES, Calif., Nov. 14, 2016 (GLOBE NEWSWIRE) -- Nova LifeStyle, Inc. (NASDAQ:NVFY), a U.S. based fast-growing, innovative designer, manufacturer and distributor of modern LifeStyle furniture, today announced financial results for the third quarter ended September 30, 2016.

Third Quarter 2016 Financial Highlights :
  • Third quarter net sales were $30.5 million, an increase of 26.9% compared to $24.0 million in the prior year period. 
  • The year over year increase was the result of a 55% increase in average selling price as the Company's recent efforts to focus its sales mix on premium products began yielding positive results.  As expected, the focus on higher-margin, lower volume products did negatively impact overall volumes, which fell 19% in the quarter.
  • Third quarter gross margin was 15.1%, compared to 14.6% in the prior year period, as the product focus noted above had a positive impact on margins. 
  • Gross profit increased 31.3% to $4.6 million for the three months ended September 30, 2016 compared to $3.5 million in the same quarter of the prior year.
  • Operating expenses in the third quarter of 2016 were $3.5 million, compared to $3.0 million in the third quarter of 2015.  As a percentage of sales, operating expenses in the third quarter of 2016 were 11.6% of sales versus 12.3% during the same period a year ago. 
  • Net income from continuing operations was $1.0 million, or $0.04 per diluted share based on 25.7 million shares outstanding in the third quarter of 2016, compared to net income from continuing operations of $0.4 million or $0.02 per diluted share based on 24.1 million shares outstanding in the same period of the prior year.
  • The Company agreed to sell its Chinese manufacturing operations for $8.5 million in order to focus the business on an "asset light" operating model. 

Management Commentary

Tawny Lam, President and Interim Chief Executive Officer of Nova LifeStyle, stated, "We are excited to report a very solid third quarter for Nova LifeStyle.  Our top line sales grew nearly 27% versus the same period last year as efforts we have made in recent quarters to focus our sales mix on higher-margin products began to pay off in the form of higher average selling prices and improved gross margins.  Sales improved in every geography we serve, with European sales more than doubling in this quarter as compared to the same period last year as the regional economy there continues to improve.  Our expectation is that growth will continue there and we are looking to capitalize on that momentum with an increased local sales and marketing effort."

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