COMMERCE, CA--(Marketwire - Aug 14, 2012) -  Nova LifeStyle, Inc. (OTCQB: STVS) (OTCBB: STVS) (website: www.novalifestyle.com), a rapidly growing U.S. based designer, manufacturer and global distributor of urban contemporary furniture, today reported its continuing aggressive worldwide expansion generated record results in the second quarter and six months ended June 30, 2012.

Sales in the second quarter grew 74% to $16.15 million, up from $9.26 million in the same period last year, on a 15% increase in sales volume and an approximately 53% increase in average selling price. Net income increased 146% to $1.42 million compared with $0.58 million in the prior year period. Through the first half of 2012, sales were up 82% to $27.15 million, from $14.89 million a year earlier, on a 12% increase in sales volume and an approximately 62% increase in average selling prices. Net income in the first six months of 2012 grew to $2.40 million, up 11% from $1.59 million in the comparable period in 2011.

On a per share basis, 2012 second quarter diluted EPS was $0.08 compared with $0.05 in the same period last year, while 2012 first half diluted EPS was $0.13, compared with $0.13 in the prior year period. Diluted weighted average shares outstanding in last year's second quarter and first half respectively were 11,952,747 and 11,788,314 shares. In the second quarter and first half this year they increased to 18,491,138 and 18,589,410 shares respectively. The increase primarily is a consequence of two successful private placements completed in late 2011 and early 2012 which netted the Company a combined $5.61 million to finance further growth.

U.S. Led Growth

Mr. Jeffrey Wong, CEO, Chairman and Co-Founder of the Company, commented, "In the short time since we have been a public company, following our acquisition of Diamond Sofa in the U.S. in 2011, our progress has been dramatic, setting the stage for continuing strong, balanced global growth. Thus far, our growth has been led by our outstanding performance in the North American market, which produced a year over year sales gain in the second quarter of 129%, to $5.74 million, bolstered by increasing Internet sales and growing penetration of our target 'Top 100' furniture retailers and distributors."

Strong Global Growth As Well

Company President, and Co-Founder of Diamond Sofa, Ms. Tawny Lam, added, "We also have been focused on expanding direct sales of our branded furniture lines in China where year over year sales in the quarter grew 69%, to $4.85 million and we expanded our independently owned furniture franchise stores to more than 100 locations throughout the country. Starting in 2013, this will be complemented by an anticipated major boost in our OEM sales from our recently announced manufacturing agreement with IKEA. Further, in the quarter we saw a 34% sales increase in Europe, to $4.24 million, where despite a tougher economic environment, lifestyle conscious consumers remain highly attracted to the look, feel and perceived value of our urban contemporary furniture lines."

Sale of U.S. Luxury Mattresses in China Underway

"While it is an initiative we have focused on for some time," Ms. Lam added, "after the end of the second quarter, we announced in July what we believe could result in a further significant boost to our sales in China, namely, our first shipment of Ultra Premium 'Made in the USA' organic latex mattresses to our franchise network in China."

The Company said the significant growth potential it sees for these products lies not just in their comfort or the fact that they are made with the highest quality natural latex foam. Of special significance to China's upscale consumers, they are custom manufactured in the U.S. to size standards in China and are generating a strong initial response.

30% Gross Margin Target

During the second quarter and first half of 2012, the Company said that strong demand for its products necessitated increased utilization of third party manufacturers under the Company's supervision. This factor, in combination with increasing raw material prices, especially in China, had an impact on gross profit margins, which in the first half of 2012 were 25% compared with 28% a year earlier. Going forward, management believes gross profit margins will stabilize at approximately 30% as the Company's product mix broadens and more raw material costs are passed along to customers.

Factory Expansion

Additionally, the Company said construction was proceeding on the Phase II expansion of its manufacturing plant in Dongguan. It continues to anticipate completion before the end of the year, which will allow for increased self manufacturing during the course of 2013 in conjunction with its supply agreement with IKEA.

Strong Growth Outlook

Looking ahead, Mr. Wong stated, "We have charted a very aggressive growth course with our primary focus currently on the U.S. and China given the somewhat slower economic recovery we see in Europe. While consumers in the U.S. and China also are exhibiting caution, there nevertheless has been continuing growth in spending on refurbishing their homes to reflect their lifestyles. We believe this will continue to support the growth of our popular lifestyle conscious products, and lead to another year of substantial record growth in 2012 in line with our earlier forecasts."

About Nova LifeStyle, Inc.

Nova LifeStyle, Inc., a U.S. company headquartered in California, is a fast growing, innovative designer and manufacturer of modern LifeStyle furniture, primarily sofas, dining rooms, cabinets and bedrooms in matching collections. Nova's products are made in the U.S., Asia and its state of the art factory completed in 2011 in Dongguan, China and marketed worldwide. Nova's collections of LifeStyle furniture brands include Diamond Sofa (www.diamondsofa.com), Colorful World, Giorgio Mobili and others. Nova's products feature urban contemporary styles with comfort and functionality and upscale luxury designs appealing to LifeStyle-conscious middle and upper middle-income consumers in the U.S., China, Europe and elsewhere in the world. To learn more about Nova LifeStyle, Inc., please visit 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.

NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
			Six Months Ended June 30,								Three Months Ended June 30,
			2012				2011				2012				2011
			(Unaudited)								(Unaudited)
Net Sales (Including sales to related party of $0 and $625,582 during the six months ended June 30, 2012 and 2011; and $0 and $261,180 during the three months ended June 30, 2012 and 2011, respectively)			$	27,146,315			$	14,892,220			$	16,147,061			$	9,259,430
Cost of Sales				20,320,386				10,650,433				12,331,407				6,806,804
Gross Profit				6,825,929				4,241,787				3,815,654				2,452,626
Operating Expenses
	Selling expenses			1,354,553				795,109				664,646				574,633
	General and administrative expenses			2,360,913				1,416,998				1,309,698				1,090,445
	Loss on disposal of plant, property and equipment			123,775				--				--				--
Total Operating Expenses				3,839,241				2,212,107				1,974,344				1,665,078
Income From Operations				2,986,688				2,029,680				1,841,310				787,548
Other Income (Expenses)
	Non-operating income (expense)			(23,039	)			10,474				(25,338	)			5,512
	Foreign exchange transaction gain (loss)			23,975				(60,729	)			15,663				(37,531	)
	Financial expense			(46,898	)			(16,322	)			(36,086	)			(6,933	)
Total Other Expenses, Net				(45,962	)			(66,577	)			(45,761	)			(38,952	)
Income Before Income Tax				2,940,726				1,963,103				1,795,549				748,596
Income Tax Expense				537,104				378,035				370,589				169,070
Net Income				2,403,622				1,585,068				1,424,960				579,526
Other Comprehensive Income
	Foreign currency translation			(49,085	)			235,985				(61,930	)			131,511
Comprehensive Income			$	2,354,537			$	1,821,053			$	1,363,030			$	711,037
Basic weighted average shares outstanding				18,431,799				11,788,314				18,486,567				11,952,747
Diluted weighted average shares outstanding				18,589,410				11,788,314				18,491,138				11,952,747
Basic net earnings per share			$	0.13			$	0.13			$	0.08			$	0.05
Diluted net earnings per share			$	0.13			$	0.13			$	0.08			$	0.05

NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2012 (UNAUDITED) AND DECEMBER 31, 2011
			June 30,				December 31,
			2012				2011
			(Unaudited)
Liabilities and Stockholders' Equity
Current Liabilities
	Accounts payable		$	3,339,981			$	6,758,058
	Line of credit			3,495,140				--
	Advance from customers			90,755				91,021
	Accrued liabilities and other payables			825,303				834,128
	Taxes payable			426,620				198,984
Total Current Liabilities				8,177,799				7,882,191
Noncurrent Liabilities
	Deferred rent payable			48,792				58,949
	Income tax payable			4,215,859				4,016,266
Total Noncurrent Liabilities				4,264,651				4,075,215
Total Liabilities				12,442,450				11,957,406
Contingencies and Commitments
Stockholders' Equity
	Common stock, $0.001 par value; 75,000,000 shares authorized, 18,486,567 and 17,898,267 shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively			18,487				17,898
	Additional paid-in capital			18,970,395				17,074,535
	Subscription receivable			(1,950,000	)			(1,950,000	)
	Statutory reserves			6,241				6,241
	Accumulated other comprehensive income			2,089,889				2,138,974
	Retained earnings			7,976,058				5,572,436
Total Stockholders' Equity				27,111,070				22,860,084
Total Liabilities and Stockholders' Equity			$	39,553,520			$	34,817,490

NOVA LIFESTYLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2012 (UNAUDITED) AND DECEMBER 31, 2011
			June 30,			December 31,
			2012			2011
			(Unaudited)
Assets
Current Assets
	Cash and cash equivalents		$	2,136,562		$	2,505,179
	Accounts receivable, net			22,162,058			18,974,612
	Accounts receivable - related party			--			28,289
	Due from factor			--			203,351
	Advance to suppliers			1,123,472			349,767
	Inventories			2,325,080			1,848,081
	Prepaid expenses and other receivable			302,468			113,853
	Deferred tax asset			156,514			156,974
Total Current Assets				28,206,154			24,180,106
Noncurrent Assets
	Heritage and cultural assets			128,199			128,687
	Plant, property and equipment, net			8,668,266			8,721,186
	Construction in progress			978,224			91,466
	Construction deposit			--			634,830
	Goodwill			218,606			218,606
	Intangible assets, net			1,235,900			724,465
	Deferred tax asset, net			118,171			118,144
Total Noncurrent Assets				11,347,366			10,637,384
Total Assets			$	39,553,520		$	34,817,490