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XMAX, XMAX Inc.

Household Durables capital-intensive UnprofitableDistress / turnaround

XMAX Inc. is a U.S.-headquartered innovative designer and distributor of contemporary styled residential and commercial furniture incorporated into a dynamic marketing and sales platform offering retail as well as online selection and global purchase fulfillment.

The Company's products are marketed through wholesale and retail channels as well as various online platforms worldwide.

The Company's family of brands includes Nova LifeStyle, Diamond Sofa ( www.diamondsofa.com ) and Nova Living.

Latest annual: FY2025 10-K

XMAX · XMAX Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$17M

+72.6% YoY · 8% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $16M 5-yr avg $13M

Gross margin 24% 5-yr avg 18%

Operating margin −14.3% 5-yr avg −56.6%

ROIC −5% 5-yr avg −878%

Owner-earnings margin −5% 5-yr avg −32%

Free cash flow margin −5% 5-yr avg −32%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Unprofitable. No meaningful revenue yet; the record is the cash on hand against the burn. Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock.
What moves the needle: Operating margin has run around −31% through the cycle on a 19% gross margin, the operating line deeply negative — so the lever is the path to a margin at all: revenue growth against the cost curve and the cash runway, not the level of a margin that isn't there yet. Inventory runs near 21% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −18%, above 15% in 0 of 9 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Revenue spreads across 3 regions, the largest North America at 52%.

Revenue by geography, FY2025

North America52%$9M
Hong Kong SAR China47%$8M
Other Countries1%$86K

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2017–2025

realized figures from each filing · older years to the left

2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
										Income statement
$106M	$81M	$22M	$11M	$13M	$13M	$11M	$10M	$17M	$16M	RevenueRevenue
19%	19%	6%	—	44%	−61%	38%	44%	25%	24%	Gross marginGross mgn
9%	8%	25%	41%	45%	44%	46%	63%	28%	30%	SG&A / revenueSG&A/rev
—	—	—	0%	1%	0%	28%	21%	—	8%	R&D / revenueR&D/rev
$7M	$5M	($6M)	($26M)	($4M)	($16M)	($6M)	($5M)	($2M)	($2M)	Operating incomeOp. inc.
6.4%	5.9%	−26.4%	−231.8%	−30.7%	−127.3%	−57.9%	−55.4%	−11.5%	−14.3%	Operating marginOp. mgn
$4M	$5M	($9M)	($26M)	($20M)	($17M)	($8M)	($6M)	($3M)	($3M)	Net incomeNet inc.
										Cash flow & returns
($1M)	($7M)	$15M	($2M)	($5M)	($5M)	($2M)	($1M)	($446K)	($765K)	Operating cash flowOp. cash
$2M	$38K	$36K	$62K	$79K	$88K	$55K	$61K	$10K	$4K	DepreciationDeprec.
($9M)	($13M)	$23M	$24M	$15M	$11M	$6M	$3M	($420K)	($1M)	Working capital & otherWC & other
$27K	$28K	$26K	$365K	$111K	$9K	—	$14K	—	$14K	CapexCapex
0.0%	0.0%	0.1%	3.2%	0.9%	0.1%	—	0.1%	—	0.1%	Capex / revenueCapex/rev
($1M)	($7M)	$15M	($2M)	($5M)	($5M)	—	($1M)	—	($779K)	Owner earningsOwner earn.
−1.3%	−8.5%	67.6%	−21.5%	−39.0%	−42.2%	—	−14.5%	—	−4.9%	Owner earnings marginOE mgn
($1M)	($7M)	$15M	($2M)	($5M)	($5M)	—	($1M)	—	($779K)	Free cash flowFCF
−1.3%	−8.5%	67.6%	−21.5%	−39.0%	−42.2%	—	−14.5%	—	−4.9%	Free cash flow marginFCF mgn
—	$0	$616K	$0	—	—	—	—	—	—	BuybacksBuybacks
6%	6%	-8%	-65%	-18%	-245%	-3986%	-134%	-6%	-5%	ROICROIC
5%	7%	-13%	-64%	-85%	-259%	-1556%	-178%	-12%	-7%	Return on equityROE
										Balance sheet
$6M	$244K	$7M	$9M	$6M	$1M	$369K	$162K	$7M	$10M	Cash & investmentsCash+inv
$54M	$67M	$390K	$515K	$103K	$288K	$47K	$36K	$2M	$2M	ReceivablesReceiv.
$6M	$6M	$30M	$33M	$3M	$5M	$2M	$5M	$2M	$2M	InventoryInvent.
$2M	$4M	$418K	$744K	$358K	$321K	$430K	$729K	$327K	$129K	Accounts payablePayables
$59M	$69M	$30M	$33M	$2M	$5M	$2M	$4M	$4M	$4M	Operating working capitalOper. WC
$75M	$85M	$68M	$43M	$26M	$8M	$4M	$8M	$12M	$20M	Current assetsCur. assets
$3M	$12M	$1M	$2M	$2M	$2M	$4M	$6M	$2M	$2M	Current liabilitiesCur. liab.
27.9×	7.2×	46.8×	21.4×	14.1×	5.0×	1.0×	1.4×	4.9×	13.0×	Current ratioCurr. ratio
$219K	$219K	$219K	$219K	$219K	$219K	$219K	$219K	—	$219K	GoodwillGoodwill
$80M	$90M	$72M	$46M	$30M	$12M	$6M	$10M	$36M	$47M	Total assetsAssets
$4M	$6M	$0	—	—	—	—	$198K	$5M	$5M	Total debtDebt
($2M)	$6M	($7M)	—	—	—	—	$36K	($2M)	($5M)	Net debt / (cash)Net debt
39.0×	28.5×	—	—	—	—	—	—	—	-13.4×	Interest coverageInt. cov.
$68M	$75M	$66M	$41M	$23M	$7M	$496K	$3M	$28M	$40M	Shareholders’ equityEquity
2.0%	1.5%	1.7%	1.4%	1.0%	4.5%	4.5%	7.7%	20.2%	21.3%	Stock comp / revenueSBC/rev
										Per share
1.4M	1.4M	1.4M	1.4M	1.5M	1.4M	1.6M	3.8M	20.7M	44.8M	Shares out (diluted)Shares
$76.74	$56.74	$15.52	$7.91	$8.24	$9.20	$7.12	$2.57	$0.81	$0.35	Revenue / shareRev/sh
$2.71	$3.70	$-6.07	$-18.17	$-13.10	$-12.34	$-4.96	$-1.48	$-0.17	$-0.06	EPS (diluted)EPS
$-0.97	$-4.83	$10.49	$-1.70	$-3.21	$-3.88	—	$-0.37	—	$-0.02	Owner earnings / shareOE/sh
$-0.97	$-4.83	$10.49	$-1.70	$-3.21	$-3.88	—	$-0.37	—	$-0.02	Free cash flow / shareFCF/sh
$0.02	$0.02	$0.02	$0.25	$0.07	$0.01	—	$0.00	—	$0.00	Cap. spending / shareCapex/sh
$49.32	$52.36	$46.62	$28.52	$15.38	$4.77	$0.32	$0.83	$1.35	$0.90	Book value / shareBVPS

Share counts before 2018 are restated ×1/5 for a stock split, so per-share figures sit on one basis.

Share counts before 2022 are restated ×1/4 for a stock split, so per-share figures sit on one basis.

The diluted share count moved ×2.42 into 2024 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

The diluted share count moved ×5.49 into 2025 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

The diluted share count moved ×2.17 into TTM — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

Per-share growththe realized rate an owner's share compounded

	8-yr	5-yr
Revenue / share	−43.4%/yr	−36.6%/yr
Capital spending / share	−20.9%/yr (7-yr)	−27.2%/yr
Book value / share	−36.2%/yr	−45.7%/yr

The record, charted

FY2017–2025

Each measure over its full record; the current point and the worst year marked. Share counts on the current split basis.

Share count

21Mpeak FY2025

ROIC

−6%low FY2023

Gross margin

25%low FY2022

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

($1M)owner earningsvs.($6M)net incomelow FY2018

Owner-earnings bridge

FY2019–FY2024cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2024 the business turned a $6M loss into ($1M) of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

	FY2024	FY2022	FY2021	FY2020	FY2019
Reported net income	($6M)	($17M)	($20M)	($26M)	($9M)
Depreciation & amortizationnon-cash charge added back	+$61K	+$88K	+$79K	+$62K	+$36K
Stock-based compensationreal costnon-cash, but a real cost	+$747K	+$574K	+$130K	+$157K	+$369K
Working capital & othertiming of cash in and out, other non-cash items	+$3M	+$11M	+$15M	+$24M	+$23M
Cash from operations	($1M)	($5M)	($5M)	($2M)	$15M
Capital expenditurecash put back in to keep running and to grow	−$14K	−$9K	−$111K	−$365K	−$26K
Owner earnings	($1M)	($5M)	($5M)	($2M)	$15M
Owner-earnings marginowner earnings ÷ revenue	-15%	-42%	-39%	-22%	68%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $747K), owner earnings is nearer ($2M).

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? -11.4×

Does not cover its interest

Operating income ($2M) ÷ interest expense $170K

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? +$2M

Net cash

Cash $7M − debt $5M

What this means
Cash and short-term investments exceed every dollar of debt by $2M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 107d

Long (60+ days)

DSO 53 + DIO 63 − DPO 10 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital -18%

Below average through the cycle

9-yr median, range -3986%–6%; -6% latest = NOPAT ($2M) ÷ invested capital $26M

Industry peers: median 13%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran -6% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin -15%

Consumes cash through the cycle

7-yr median margin, range -42%–68%; latest ($460K) = operating cash ($446K) − maintenance capex $14K

Industry peers: median 7%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -3% of revenue this year, a -15% median across 7 years. Treating stock comp as the real expense it is (less $3M of SBC) leaves ($4M).
Are earnings backed by cash? ($446K)

Loss, and burning cash

Net income ($3M) · cash from operations ($446K)

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did not.

How is the cash used?

Where do the earnings go? —

No surplus to allocate

What this means
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
Investing or harvesting? 1.42×

Expanding

Capex $14K ÷ depreciation $10K

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $17M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 4.92×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $5M vs $9M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (9-yr record) · 7 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −3704%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.09/share (latest year $-0.05), the averaged base the calculator's gate runs on, and book value is $0.44/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2017–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 2 of 9

What this means
Lost money in 7 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 5 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin −5% → −42% (3-yr avg ends)

In the filing’s words The filing attributes gains to higher prices, but the margin in the record has not followed — the claim outruns the result here.

What this means
Through the cycle the operating margin slipped — about −5% early to −42% lately, median −31% — competition or costs are biting in.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Worst year 2020 · −231.8% op. margin

What this means
Operations went underwater in 2020, understand why before trusting the good years.
Share count −3.6%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Our offerings may rely on external foundation models, open-source components, model hubs, APIs, datasets, and cloud platforms under licenses and contracts that can change or be terminated.”

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$20M

Cash & short-term investments$10M
Receivables$2M
Inventory$2M
Other current assets$6M

Current liabilities$2M

Accounts payable$129K
Other current liabilities$1M

Current ratio12.96×all current assets ÷ what's due · Graham looked for 2×

Quick ratio11.87×stricter: inventory excluded

Cash ratio6.52×strictest: cash alone against what's due

Working capital$18Mthe cushion left after near-term bills

Revenue, latest quarter vs. a year ago−32.4%the freshest read on whether the business is still growing

Current ratio, recent quarters0.9× → 13.0×

Deeper floors

Tangible book value$40Mequity stripped of goodwill & intangibles

Net current asset value$13MGraham's net-net: current assets less all liabilities

Debt incl. operating leases$476K$476K of it operating leases

Deferred revenue$89Kcustomer cash collected before delivery; operating float

From the company's latest filing.

Management, ownership & pay

From the proxy: how much of the business the people running it own, and how they are paid.

Stock-based compensation$3M
The slice of the business handed to employees in shares this year, 20% of revenue. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why XMAX Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2017–2025.

1 of the 4 tests turned up something to look into; the other 3 came back clean.

Look hereIs it less profitable than it was?−31.9% vs 19.3%
The owner-earnings margin averaged 19.3% early in the record and −31.9% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.

And these came back clean

Did debt outgrow the business?
Did receivables and inventory outpace sales?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Income taxes, Credit & receivables, Inventory as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Household Durables

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
LEGLeggett & Platt Incorporated	$4.1B	21%	10.0%	13%	7%
MLKNMillerKnoll Inc.	$3.7B	37%	6.1%	18%	6%
HNIHNI Corporation	$2.8B	37%	5.7%	13%	7%
LZBLa-Z-Boy Incorporated	$2.1B	42%	7.7%	18%	7%
CODICompass Diversified Holdings	$1.9B	37%	2.3%	2%	4%
ETDEthan Allen Interiors Inc.	$615M	57%	10.7%	13%	7%
FLXSFlexsteel Industries Inc.	$441M	20%	4.1%	8%	3%
XMAXXMAX Inc.	$17M	22%	-30.7%	-18%	-15%
Group median	—	37%	5.9%	13%	6%

The price

What a price has to assume.

What the price implies

reverse-DCF

XMAX Inc. is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.

Today’s price $

The assumptions Required return 9% Years to get there 10 Revenue growth 0%

Revenue, delivered3%/yr’20→’25

Mature owner-earnings margin 15%

Enter a price to run it.

Owner earnings it must reach—

Margin the price demands—

Owner-earnings margin today−5%

Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.

Weigh XMAX against another business →

Cite: Owner Scorecard, "XMAX Inc. (XMAX), the owner's record," https://ownerscorecard.com/c/XMAX, data as of 2026-07-09.

Manual order: ← XIFR its page in the Manual XMTR →

Industry order: ← WHR the Household Durables chapter