Nova LifeStyle Announces Third Quarter 2018 Financial Results

North American Sales Up 11% Versus Prior Year Period

LOS ANGELES, Nov. 09, 2018 (GLOBE NEWSWIRE) -- Nova LifeStyle, Inc. (NASDAQ: NVFY), a leading U.S.-based, innovative designer and distributor of modern LifeStyle home products, today announced financial results for the third quarter and nine months ended September 30, 2018.

Management Commentary
Tawny Lam, Chief Executive Officer of Nova LifeStyle, commented, "Our North American sales increased by 11%, which was offset by a decrease of sales to Australia and our sales efforts continue to be focused on higher margin products following our exit from the low-margin, mass product segment of the market. We are optimistic that our sales growth will continue in North American region.   Our largest selling product categories in the three months ended September 30, 2018 were sofas, cabinets and beds, which accounted for approximately 64%, 10% and 9% of sales, respectively. Overall, third quarter sales faced a very challenging comparison with last year as the prior year period featured very significant orders from an Australian customer. We are also working diligently with existing customers to shorten our collection cycle and lower our receivable amounts, and expect to make great progress in this regard in the coming fourth quarter.  We are looking forward to a strong year end after solid order activity and significant indications of interest at the recent High Point Market.”

About Nova LifeStyle
Nova LifeStyle, Inc., a NASDAQ Global Market listed company headquartered in California, is a fast growing, innovative designer and distributor of modern LifeStyle furniture; primarily sofas, dining rooms, cabinets, office furniture and related components, bedrooms, and various accessories in matching collections. Nova's products are made in the US, Europe, and Asia that include LifeStyle brands such as Diamond Sofa, Nova QwiK, and Bright Swallow International. Nova's products feature urban contemporary styles that integrate comfort and functionality, incorporating upscale luxury designs appeals to middle and upper middle-income consumers in the U.S., China, Europe, and elsewhere in the world. Visit Nova LifeStyle’s website at www.NovaLifeStyle.com.

Safe Harbor Statement
All statements in this press release that are not historical are forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual results will not differ from the company's expectations. You are cautioned not to place undue reliance on any forward-looking statements in this press release as they reflect Nova's current expectations with respect to future events and are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated. Potential risks and uncertainties include, but are not limited to, the risks described in Nova's filings with the Securities and Exchange Commission.

Company Contact:
Investor Relations:
The Equity Group Inc.
In U.S.
Adam Prior, Senior Vice President
+1 (212) 836-9606
aprior@equityny.com

NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017 (UNAUDITED)
	Nine Months Ended September 30,								Three Months Ended September 30,
	2018				2017				2018				2017
Net Sales	$	63,159,929			$	70,813,414			$	16,747,827			$	33,222,625
Cost of Sales		50,834,321				58,741,122				13,529,002				27,323,972
Gross Profit		12,325,608				12,072,292				3,218,825				5,898,653
Operating Expenses
Selling expenses		2,534,436				2,690,342				853,378				1,003,906
General and administrative expenses		7,570,814				7,608,323				3,722,250				2,124,614
Total Operating Expenses		10,105,250				10,298,665				4,575,628				3,128,520
Income (Loss) From Operations		2,220,358				1,773,627				(1,356,803	)			2,770,133
Other Income (Expenses)
Non-operating expense, net		596				797				(3,486	)			--
Foreign exchange transaction loss		(430	)			(324	)			11				(94	)
Interest expense, net		(92,416	)			(133,093	)			(36,630	)			(40,932	)
Financial expense		(106,889	)			(86,335	)			(37,392	)			(34,508	)
Total Other Expenses, Net		(199,139	)			(218,955	)			(77,497	)			(75,534	)
Income (Loss) Before Income Taxes		2,021,219				1,554,672				(1,434,300	)			2,694,599
Income Tax Benefit		(505,074	)			(750,037	)			(942,267	)			(262,034	)
Net Income (Loss) and Comprehensive Income (Loss)	$	2,526,293			$	2,304,709			$	(492,033	)		$	2,956,633
Basic weighted average shares outstanding		28,349,945				27,570,425				28,439,977				27,846,921
Diluted weighted average shares outstanding		28,659,655				27,704,406				28,439,977				27,980,629
Net income (loss) per share of common stock
Basic	$	0.09			$	0.08			$	(0.02	)		$	0.11
Diluted	$	0.09			$	0.08			$	(0.02	)		$	0.11

NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2018 (UNAUDITED) AND DECEMBER 31, 2017
	September 30, 2018				December 31, 2017
Assets
Current Assets
Cash and cash equivalents	$	883,948			$	5,722,716
Accounts receivable, net		53,718,740				54,006,513
Advance to suppliers		19,721,445				8,580,609
Inventories		5,787,459				6,374,560
Prepaid expenses and other receivables		186,400				232,935
Total Current Assets		80,297,992				74,917,333
Noncurrent Assets
Plant, property and equipment, net		141,719				157,246
Lease deposit		43,260				43,260
Goodwill		218,606				218,606
Intangible assets, net		3,897,580				4,202,608
Deferred tax asset		318,961				318,961
Total Noncurrent Assets		4,620,126				4,940,681
Total Assets	$	84,918,118			$	79,858,014

NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS – CONTINUED
SEPTEMBER 30, 2018 (UNAUDITED) AND DECEMBER 31, 2017
	September 30, 2018				December 31, 2017
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	3,449,481			$	1,634,554
Line of credit		4,851,825				-
Advance from customers		99,402				19,826
Accrued liabilities and other payables		594,536				847,756
Income tax payable		394,562				178,307
Total Current Liabilities		9,389,806				2,680,443
Noncurrent Liabilities
Line of credit		-				4,202,118
Income tax payable		3,579,320				4,527,849
Total Noncurrent Liabilities		3,579,320				8,729,967
Total Liabilities		12,969,126				11,410,410
Contingencies and Commitments
Stockholders' Equity
Common stock, $0.001 par value; 75,000,000 shares authorized, 28,474,490 and 28,191,927 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively		28,474				28,192
Additional paid-in capital		39,657,190				38,682,377
Statutory reserves		6,241				6,241
Retained earnings		32,257,087				29,730,794
Total Stockholders' Equity		71,948,992				68,447,604
Total Liabilities and Stockholders' Equity	$	84,918,118			$	79,858,014

NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017 (UNAUDITED)
	Nine Months Ended September 30,
	2018				2017
Cash Flows From Operating Activities
Net income	$	2,526,293			$	2,304,709
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		333,516				1,143,319
Deferred tax benefit		--				(623,872	)
Stock compensation expense		1,004,470				1,773,537
Changes in bad debt allowance		2,298,488				203,905
Changes in operating assets and liabilities:
Accounts receivable		(2,010,715	)			4,960,037
Advance to suppliers		(11,140,836	)			(8,281,288	)
Inventories		587,101				(3,939,526	)
Other current assets		(14,694	)			(21,452	)
Accounts payable		1,814,927				(2,206,628	)
Advance from customers		79,576				(494,582	)
Accrued liabilities and other payables		(252,867	)			(54,458	)
Taxes payable		(732,274	)			(126,163	)
Net Cash Used in Operating Activities		(5,507,015	)			(5,362,462	)
Cash Flows From Investing Activities
Assignment fee received		--				1,250,000
Purchase of property and equipment		(12,960	)			(17,443	)
Advances to unrelated parties		--				(8,835,000	)
Repayment from unrelated parties		--				15,835,000
Net Cash (Used in) Provided by Investing Activities		(12,960	)			8,232,557
Cash Flows From Financing Activities
Proceeds from line of credit and bank loan		56,063,918				36,881,842
Repayment to line of credit and bank loan		(55,414,211	)			(41,537,643	)
Proceeds from the exercise of options for common stocks		31,500				--
Net Cash Provided by (Used in) Financing Activities		681,207				(4,655,801	)
Net decrease in cash and cash equivalents		(4,838,768	)			(1,785,706	)
Cash and cash equivalents, beginning of period		5,722,716				2,587,743
Cash and cash equivalents, ending of period	$	883,948			$	802,037
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Income tax payments	$	227,200			$	--
Interest expense	$	87,110			$	159,686