Wed, Aug 14, 8:23 PM (153 days ago)
In the second quarter of 2024, Nova Lifestyle, Inc. reported a substantial decline in net sales, dropping 40% to $2.69 million from $4.46 million in Q2 2023. This decrease is attributed mainly to a 69% reduction in sales volume, despite a 96% rise in average selling prices, following the liquidation of jade mats in 2023. Gross profit marginally decreased to $1.19 million, while gross profit margin improved to 44%. Operating expenses fell to $1.69 million, driven by reduced marketing costs, although general and administrative expenses rose due to increased consulting fees and stock compensation. The company incurred a net loss of $563,489, slightly higher than the previous year's loss of $538,581. Cash flow from operating activities turned negative at $690,415, contrasting sharply with $1.43 million in positive cash flow in 2023. The working capital deficit increased to $322,470, with a current ratio of 0.92:1. Looking ahead, Nova aims to regain compliance with NASDAQ listing requirements by October 2024 and plans to enhance sales through participation in U.S. furniture fairs and development of IT systems for home decoration. The company continues to face uncertainties in profitability and cash flow management.