Nova LifeStyle, Inc. reported a net loss of $5.56 million for the fiscal year ending December 31, 2024, a decrease from a loss of $7.72 million in the previous year. The company's net sales fell by 13% to $9.69 million, down from $11.09 million in 2023, primarily due to a 39% decrease in sales volume, although this was partially offset by a 43% increase in average selling prices. The largest selling product categories for 2024 were sofas, beds, and coffee tables, which accounted for approximately 50%, 13%, and 8% of total sales, respectively. The decline in sales was significantly influenced by the liquidation of jade mats inventory in 2023, which had previously contributed to sales.
In terms of operational changes, Nova LifeStyle has shifted its focus away from low-margin products to enhance profitability. The company has also undergone a strategic transition in its manufacturing processes, moving some production from China to other Asian countries like Vietnam and India to mitigate the impact of U.S. tariffs. This shift is part of a broader strategy to improve gross profit margins, which increased to 44% in 2024 from 38% in 2023, largely due to the absence of low-margin jade mat sales.
The company has also made significant changes to its capital structure, including a reverse stock split and an increase in authorized shares from 3 million to 250 million. These changes were approved by the Board of Directors and shareholders in 2023. As of December 31, 2024, Nova LifeStyle had 27 full-time employees, with a majority based in the U.S. and a small team in Malaysia. The company aims to enhance its workforce to support its growth strategy, which includes expanding its distribution network and increasing direct sales.
Looking ahead, Nova LifeStyle anticipates that its focus on high-quality, stylish products will continue to attract consumer demand, particularly in North America, which accounted for 97.4% of total sales in 2024. The company plans to further develop its online sales presence and expand its product offerings to capitalize on emerging market trends. However, it remains cautious about potential economic downturns, inflation, and high-interest rates that could impact consumer spending in the furniture market. The company is actively monitoring its compliance with NASDAQ listing requirements, particularly regarding stockholder equity and share price, as it navigates these challenges.
About Nova Lifestyle, Inc.
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