Transcript Slide 1

Corporate Presentation – Jan 2015
Safe Harbor Statement
This presentation contains "forward-looking statements" within the meaning of
the "safe-harbor" provisions of the Securities Litigation Reform Act of 1995.
Such statements involve known and unknown risks, uncertainties and other factors that
could cause the actual results of the Company to differ materially from the results
expressed or implied by such statements, including changes from anticipated
levels of sales, future national or regional economic and competitive conditions,
changes in relationships with customers, access to capital, difficulties in developing and
marketing new products, marketing existing products, customer acceptance of existing and new
products, and other factors.
Accordingly, although the Company believes that the expectations reflected in such forwardlooking statements are reasonable, there can be no assurance that such expectations will prove
to be correct. The Company has no obligation to update the forward-looking statements
contained in this presentation.
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Nova LifeStyle: Snapshot
Nova LifeStyle, a U.S. company, is a rapidly growing designer, manufacturer and distributor of branded and third
party modern LifeStyle furniture. An industry innovator and niche leader in the U.S. and abroad, Nova is a highly
sought after quality OEM manufacturer, with a growing e-commerce presence in the U.S. and China and has become
an emerging leader in the China market via e-commerce sales and franchising showroom opportunities.
Nova LifeStyle is the result of a long history between Nova, which was founded in 1993 by Jeffrey Wong (CEO) and
Sammy Ho (CFO) in China, and Diamond Sofa, which was founded in 1992 by Tawny Lam (President) in the U.S. In
1996 the two entities began working together and then merged as Nova Lifestyle becoming public in 2011 via a
reverse merger.
Nova’s products are made in the U.S. and Asia and marketed worldwide. Nova’s collections of LifeStyle furniture
brands include Diamond Sofa, Colorful World, Giorgio Mobili, Bright Swallow and others. Nova’s products feature
urban contemporary styles with comfort and functionality in matching furniture collections and upscale luxury designs
appealing to LifeStyle-conscious middle and upper middle-income consumers.
Stock Summary
+ NASDAQ: NVFY
+ Stock Price: $3.03 *
+ Average Vol (3 Months) 75,410
+ P/E (ttm): 7.68 *
+ Shares Out. 20.79 M
*
+ Market Cap: 63 M *
+ EPS (ttm) 0.39 *
+ Corporate Headquarters: Commerce, CA + Employees: 700+
•
As of Jan 2, 2014
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Global Markets: Overview
Geographical distribution of sales (9M 2014)
Year over Year sales growth (9M 2014 vs 9 M 2013)
North America
63%
N. America revenues
as a percentage of
total sales
9M 2014
Europe
44%
Sales increase in
N. America
9M 2014 vs 9 M 2013
12%
27%
Sales decrease in
Europe revenues as a
Europe
percentage of total sales
9M 2014 vs 9 M 2013
9M 2014
Greater demand for furniture in the U.S.:
•
•
Asia
24%
21%
9M 2014
Sales increase in
Asia
9M 2014 vs 9 M 2013
Higher disposable income and strong consumer sentiment projected through 2016 Asia revenues as a
percentage of total sales
will help boost demand for furniture in the U.S. (1)
As home ownership rises, purchases of household goods expected to also rise. (2)
Greater demand for furniture in China:
•
•
43% of consumers like modern style furniture (3)
GDP per capita projected to increase to over US$10,000 in 2020 from US$4,000 in
2010; tier1 city projected to exceed US $20,000 in 2020 (4)
Higher online purchases of furniture with significant growth:
•
•
•
Up 15% Globally (6)
18.5% in the U.S. in 2013 (5)
Up 60% in China in 2013 (6)
Source:
(1): Centre for Industrial Studies "World Furniture Outlook 2013“
(3): National Bureau of Statistics of China report dated April 13, 2012
(5): "Spending Pulse (MasterCard Advisors) Retail Report
(2): Centre for Industrial Studies "World Furniture Outlook 2011/2012“
(4): Industry Research Report by Hogweed Bay in CICC, November 10, 2009
(6): "IBIS World U.S. Furniture Industry Report” http://www.ibisworld.com/industry/default.aspx?indid=1016
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Our Brands, Products & Innovations
USA
Europe & UAE
Asia
Products:
•Leather upholstered furnishings
•Living room seating, sofas, love seats, recliners, sectionals and accent chairs
•Urban beds and latex sleep mattresses
•Coffee tables and bar stools
•TV stands, display shelving and room dividers
•Diverse bedroom and dining collections
•QwiK office cabinets and storage (USA only)
•Office furniture: desk, credenzas, cabinets, shelving and storage (Europe, UAE & Asia only)
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Sales: US and Canada
Diamond Sofa is a strong respected American brand and innovative distributor and
designer of contemporary LifeStyle furniture products in the U.S. since 1992
Furniture Today's Top 100 U.S. furniture stores posted a 7.8% increase in furniture,
bedding and accessories sales in 2013, growing revenue to a combined $34.1 billion, up
from $31.7 billion the year before
Sales and Distribution
•Wholesale to numerous stores ranked in the
top 100 furniture companies in the U.S. with
both storefronts and e-commerce sales venues
•Showrooms: Los Angeles, CA, Las Vegas,
Nevada; & High Point, North Carolina
•Key North American trade shows and
conventions
•Canadian distribution through The Brick.
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Established Customers and Sales Channels:
U.S. and Canada
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Sales: China and Other Asia Territories
Higher profit margins through direct sales in China
100+ franchisees in China since 2010, with a future goal of 200 locations
Chinese furniture factory orders rose 5% in June with shipments ticking up by 4%
according to Furniture Today August 29, 2014
Sales and Distribution
•Profitable and fast-growing franchising model
•Strategic store placement
•Direct design and manufacturing capabilities
•Key international trade shows and
conventions
•E-Commerce websites: Tmall and JD.com
•Q4 Launch of Nova LifeStyle e-commerce site
– only dedicated online furniture site in China
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Established Customers and Sales Channels:
China and other Asia territories
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Sales: Europe, U.A.E. and Other Territories
Products compliment consumer preferences for “urban contemporary”, smaller homes and
apartments and trend of loft-style open look
According to Euromonitor International’s Aug 2014 report, e-commerce sales
growth has soared by 127% in current value terms over the past five years.
Sales and Distribution
•Strong presence in the European markets
both in stores and on e-commerce websites
•Clients are primarily major retailers
•ODM / OEM capabilities
•Urban contemporary style in high demand
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Established Customers and Sales Channels:
Europe, U.A.E. and other territories
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Marketing Strategy: Overview
• All furniture offerings are supported by sample display showrooms, brochures and online
marketing
• Franchise network in China to increase brand awareness among middle and upper middleincome consumer:
• Participate in trade key exhibitions globally
• Multiple high profile advertising options to promote modern LifeStyle furniture
Nova exhibits at the
2014 Las Vegas Market
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Manufacturing Leader:
Well recognized manufacturing capabilities and expert sourcing
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Fully owned 1.1 million square foot manufacturing facilities in Dongguan, China
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Annual production capacity of approximately 316,000 units
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Updated production line, which meets IKEA's stringent specifications
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60,000 square foot warehouse that houses our QuickShip Program
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Over 700 talented, dedicated, and creative staff
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Products and collections are designed to appeal to consumer preferences in specific markets
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Flexible logistics, manufacturing and delivery capabilities
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State-of-the-art Production Facilities
Woodworking
German Schelling Cutting Machines
Powder Coating
Upholstery
Board Sizing
Board Pressing
UV Automation
Warehousing and distribution
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Milestones and Key Events - 2014
Began trading
on the NASDAQ
Stock Market
Signed continuous
supply agreement with
Home Centre in U.A.E.
Added to the
Russell MicroCap®
Index
Began development of ecommerce site aimed at the
China market
Jan
Mar
Attended
Dongguan 2014
Trade Show
Attended Las
Vegas Market
Trade Show
Raised $8.95m in a
registered direct
placement
Signed agreement with Ping An Insurance
Group, #62 on Forbes Global 2000 list of the
largest companies in the world
Initiated development of
Mobile App of
e-commerce site
Apr
Jun
Jul
Secured commitment letters from
over 100 quality furniture brands
to be sold on e-commerce site
Attended High
Point Trade
Show
Attended LD
Micro Investor
Conference
Fulfilled initial
purchase order
with IKEA China
Aug
Sep
Attended China
International Furniture
Expo Trade Show
Attended Summer 2014
Las Vegas Market
Trade Show
Oct
Dec
Attended High
Point Trade
Show
Established partnership to open new
franchise stores in China with Ablejoy, one
of China's largest franchise operators
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Growth Initiatives
Near-term and long-term initiatives for 2014-2015
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Continue to Expand Partnerships and Increase Sales Contracts
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Continue to Create Innovative Designs
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Increase Sales of our Higher-Margin Branded Products
• Leverage e-commerce platform currently in development
• Grow sales of high-margin “Made in U.S.A.” furnishings and latex mattress in China
• Grow sales of modern and stylish upholstered beds with American fabric
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Expand Global Distribution
• Further penetration of “Top 100” furniture stores in the US
• Increasing e-commerce sales with Diamond Sofa brand in China and the US
• Increasing direct sales of NOVA branded furniture via 200 franchises strategy, and incremental ecommerce sales in Asia
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Launch Dedicated e-commerce Platform to Target the China
Market
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Continue Growth through Mergers and Acquisitions
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Investment Highlights
Financial Strength: Strong balance sheet and consistent track record of profitable growth
 2013 Revenue CAGR of 40%
 Cash on hand - $1.9 million as of end of Q3 2014
 Accounts Receivables, Net - $37.7 million as of end of Q3 2014
Established Distribution Channels: Direct access to the growing middle class in China
through proven franchising model
Product Variety and Design Innovation: More SKUs under NOVA brands covering all
aspects of household furniture needs compared to competitors that offer single furniture lines and execution
strategies to fit each market and region
Fully Integrated design-to-production business model: Customizable, fast
and flexible OEM capabilities
Strong Manufacturing Capability: Reputable manufacturing expertise
Stable and growing customer base: Strong and growing relationships with established
and continually expanding the customer base globally
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Financial Snapshot
Quarterly Trends
$mm
30
25
20
15
10
5
0
Revenue
Mar-13
$mm
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
4
3
Operating Income
2
Net Income
1
0
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
• 2014 Revenue and Income growth is a result of recent investment in
sales and marketing initiatives
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Financial Snapshot
Annual Trends
Revenue
Gross Margin
30.00%
$90
$mm
%
$80
25.00%
$70
20.00%
$60
$50
15.00%
$40
10.00%
$30
$20
5.00%
$10
$-
0.00%
2011
2012
2013
9M 2014
2011
2012
2013
9M 2014
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Financial Snapshot
Annual Trends
Operating Margin
%
Net Income
18.0%
$mm
16.0%
$8.0
$7.0
14.0%
$6.0
12.0%
$5.0
10.0%
$4.0
8.0%
$3.0
6.0%
4.0%
$2.0
2.0%
$1.0
0.0%
2011
2012
2013
9M 2014
$2011
2012
2013
9M 2014
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Seasoned Global Management Team
Jeffrey Wong – CEO, Co-Founder
• 22 years of experience in the furniture industry
• Vice-Chairman, Dongguan Furniture Association
• Director, the International Furniture and Decoration (Hong
Kong) Association
• Graduated from Hong Kong Victoria Technical College
Tawny Lam - President, Chairperson of the Board of
Directors
• Joined in 2011
• CEO and co-founder in 1992 of Diamond Sofa in
Commerce, California
• Extensive experience in U.S. furniture product marketing
• Bachelor of Science in Business and Finance from
California State University, Los Angeles
Sammy Ho - CFO, Co-Founder and Director
Mark Chapman - VP, Marketing
•19 years of experience in the furniture industry
•Bachelor's degree from St. Mary's University
•MBA from The Chinese University of Hong Kong in 1990
•Sales Manager of Diamond Sofa since 2004
•20 years of experience in the furniture industry
•Previously Director of Purchasing for ACE TV Rentals,
Central Rents and Day Page
•Graduated from Augustan College with a Bachelor of
Science Degree in Business Administration Management
and Marketing
Michael Barton - California Sales Director
• 30 years experience in furniture design, owned
lighting design and manufacturer- Pacific Coast
Designs from 1982 to 1991
• Sales team management for Good Companies
Inc. from 1984 to 2006
Chris Steadman - Director of Internet Sales
•Responsible for all internet sales related transactions at
Diamond Sofa, with more than 20 years of sales experience
•Prior positions include sales positions at Chico, USA, Zapf
Creation and QVC
•13 years of experience at QVC: in areas of Crafts and
Leisure, Cooking and Dining, Home Improvement, Home
Accents and Furnishing, Sports and Fitness
•Bachelor’s degree from Temple University
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Contacts
NASDAQ: NVFY
Corporate Headquarters
IR Contact:
6565 E. Washington Blvd.
KCSA Strategic Communications
Commerce, CA 90040 USA
Julie Silber
Tel: (323) 888-9999
Tel: (310) 766-9760
www.novalifestyle.com
Email: [email protected]
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