Nova Lifestyle, Inc. reported its financial results for the first quarter of 2025, revealing a net loss of $338,871, a significant improvement compared to a net loss of $1,462,756 in the same period of 2024. The company's net sales increased by 11% to $2.64 million, up from $2.38 million a year earlier, primarily driven by a 26% rise in average selling prices, despite a 12% decline in sales volume. The gross profit for the quarter was $1.20 million, reflecting a gross profit margin of 46%, compared to 43% in the prior year.
The company's operating expenses decreased substantially to $1.40 million from $2.50 million in the previous year, largely due to a 41% reduction in selling expenses and a 10% decrease in general and administrative costs. Notably, research and development expenses dropped to $390 from $751,216, as the company scaled back its investments in AI and IT systems. However, the company recorded a goodwill impairment loss of $218,606, which contributed to the overall net loss.
In terms of operational metrics, Nova Lifestyle's total current assets rose to $10.36 million as of March 31, 2025, compared to $7.93 million at the end of 2024. This increase was driven by a significant rise in advances to suppliers, which reached $7.88 million, up from $4.69 million. The company's total liabilities decreased to $5.15 million from $6.79 million, resulting in a notable increase in stockholders' equity to $6.77 million, compared to $3.12 million at the end of the previous fiscal year.
Looking ahead, Nova Lifestyle aims to enhance its market presence by participating in major U.S. furniture fairs to attract new customers and increase sales. The company is also focusing on diversifying its revenue streams through the development of innovative home decoration design IT software systems. Despite the positive outlook, the company acknowledges the challenges posed by ongoing losses and the need for additional financing to support its operations and growth initiatives. The management remains cautious about the future, emphasizing the importance of achieving profitable operations and maintaining compliance with NASDAQ listing requirements.
About Nova Lifestyle, Inc.
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