Nova LifeStyle Reports Third Quarter FY2020 Results

LOS ANGELES, Nov. 20, 2020 (GLOBE NEWSWIRE) -- Nova LifeStyle, Inc. (NASDAQ: NVFY) (“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.