Singing Machine Announces 25% Increase in Sales for Fiscal Year Ending March 2015 Annual Report

FORT LAUDERDALE, Fla., June 29, 2015 (GLOBE NEWSWIRE) -- The Singing Machine Company, Inc.  (“Singing Machine” or the “Company”) (OTCBB:SMDM) today announced financial results for its fiscal year ended March 31, 2015. 

For the full 2015 fiscal year, the Company reported approximate net sales of $39.3 million, gross profits of $8.3 million, and EBITDA of approximately $0.7 million.  

Net sales for FYE March 2015 were $39.3 million compared to $31.3 million in the same period last year, an increase of $8.0 million (25% increase).  The increase in net sales is attributed to the Company gaining new distribution with a major U.S. retailer that accounted for approximately $7.0 million of the increase in net sales. The balance of growth came from international business in such countries as Australia and Europe.  Gross profit increased by $1.2 million to $8.3 million or 21.1% of sales compared to $7.1 million or 22.6% in the prior fiscal year. The reduction in overall margin was primarily due to promotional pricing in acquiring and fulfilling the new channels of distribution.

Total operating expenses for FYE March 2015 were $7.7 million an increase of approximately $0.9 million from FYE March 2014, primarily due to a rise in selling expenses for promotional programs and in-store product displays built for some of the Company’s retail customers.   As a result, the Company reported income from operations of $0.6 million for FYE March 2015, compared to $0.3 million in FYE March 2014.  Earnings before interest, taxes, depreciation and amortization (EBITDA) for FYE March 2015 was $0.7 million compared to $0.4 million in FYE March 2014.   Net income for FYE March 2015 was $0.2 million compared to $1.0 million in FYE March 2014.  The decline in net income in FYE March 2015 compared to FYE March 2014 was primarily due a $0.9 million difference in the provision for incomes taxes.   The income tax expense provision in FYE March 2015 was $0.1 million compared to an income tax benefit in FYE March 2014 of $0.8 million.  Substantially all of the income tax provision (benefit) in the FYE March 2015 and 2014 income statements had no cash effect since the offset was to the deferred tax asset account.

Gary Atkinson, Singing Machine CEO commented, “Singing Machine has now recorded profits for four consecutive years and shown the ability to continue to grow sales. SMC sold over 1,000,000 karaoke systems this year.  Singing Machine products were featured on many notable ads that ran during the holiday season.  Our karaoke systems were stocked in over 10,000 store-fronts in North America this year.” 

“Our strategy for Fiscal March 2015 was to increase sales and grow our distribution base both domestically and internationally without injury to existing long-term customer relationships.  On these fronts we have been very successful.  Of note, SMC sales grew 25% this year and we added Wal-Mart stores and several international distributors as major customers.  We enter Fiscal March 2016 with the industry’s best list of retailers in North America and growing demand for product from retailers around the world.  Preliminary order indications for Fiscal March 2016 support our belief that the current year sales will remain strong.  From a product perspective, we are continuing to evolve our products to incorporate the latest technology to improve the karaoke experience and promote access to music through karaoke downloads and streaming. We believe this will increase our products appeal to a wider consumer demographic and create new revenue streams to the Company.   We have seen strong demand from our consumers that are embracing music streaming and downloads for karaoke.  As we grow our sales and market share, we intend to also incorporate strategies to improve gross profits and earnings to benefit our shareholders and other stakeholders.”

About The Singing Machine
Based in the US, Singing Machine® is the North American leader in consumer karaoke products.  We offer the industry's widest line of at-home karaoke entertainment products, which allow consumers to find a machine that suits their needs and skill level. As the most recognized brand in karaoke, Singing Machine products incorporate the latest technology for singing practice, music listening, entertainment and social sharing. The Singing Machine provides consumers the best warranties in the industry and access to over 10,000 songs for streaming and download.  Singing Machine products are sold through most major retailers in North America and also internationally. See www.singingmachine.com for more details.

Forward-Looking Statements
This press release contains forward‑looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward‑looking statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management and include, but are not limited to statements about our financial statements for the fiscal year ended March 31, 2015.  You should review our risk factors in our SEC filings which are incorporated herein by reference.  Such forward‑looking statements speak only as of the date on which they are made and the Company does not undertake any obligation to update any forward‑looking statement to reflect events or circumstances after the date of this release.