Fort Lauderdale, FL, Feb. 22, 2021 (GLOBE NEWSWIRE) -- The Singing Machine Company, Inc. (“Singing Machine” or the “Company”) (OTCQX: SMDM) – the worldwide leader in consumer karaoke products – today announced its financial results for its third quarter ended December 31, 2020.
Third Quarter Snapshot:
- Year-to-date earnings per share of $0.09 cents; $0.03 cents earnings per share for the quarter.
- Net sales for the quarter increased by $3.1 million from $13.8 million to $16.9 million (22% increase).
- Gross profit margin increased by 12.2% from 17.1% to 29.3% (increase in gross profit of $2.6 million for the quarter).
- Income from Operations was $1.5 million (an increase of $2.4 million) for the quarter and $3.1 million for the 9-month period.
- Net income for the quarter was $1.2 million compared to a loss of $0.8 million in the same period last year. Net income through the nine-month period was $3.4 million compared to a loss of $1.0 million over the same period last year.
- Inventory was $5.3 million compared to $8.1 million at the same point last year.
Singing Machine reports net sales of approximately $16.9 million for the quarter-ended December 31, 2020 period compared to $13.8 million in the comparable quarter of the prior year. The increase in net sales was primarily due to overall increased demand for karaoke products, most notably replenishment sales to two major customers for the Carpool Karaoke Microphone. During the quarter, the Company also saw a reduction in promotional discounts of approximately $0.8 million which indicated an increased willingness of consumers to pay full price for products.
Gross profit margin increased to 29.3% compared to approximately 17.1% reported in the prior year. The increase in gross margin was mainly due to overall product margin growth, particularly margin contribution from the Carpool Karaoke Mic as well as less promotions run during the third quarter.
Total operating expenses increased by $0.2 million from $3.3 million in the prior year to $3.5 million for the current quarter. The increase in expenses was primarily due to one-time bonuses awarded to staff and management as well as a rent increase at the Company’s warehouse operation in California.
As a result, the Company reported a net income for the quarter of $1.2 million (or $.03 cents per share) compared to net income of $0.8 million in the prior year. Net income for the nine-month period was $3.4 million (or $.09 cents per share) compared to a loss of $1.0 million in the same period of the prior year.
For financial tables, click here.
Management Commentary:
Gary Atkinson, Singing Machine CEO, commented, “This was another banner quarter for the Company despite persistent challenging market conditions. While the pandemic has given us a strong tailwind, we continued to exceed expectations, delivering double digit growth, tremendous margin expansion, as well as a significant increase in profitability. Our nine-month earnings per share of $0.09 cents represents another milestone for the Company. As we move into fiscal 2022, all our market research indicates that consumer behavior will still revolve around in-home entertainment choices and we believe we are well-positioned to take advantage of this continued trend.”
Bernardo Melo, VP of Global Sales & Marketing, commented, “During the holiday quarter we saw strong demand for in-home karaoke across all price points. Historically, the holiday quarter can be very price promotion driven with many brands fighting for visibility and market share. However, this quarter we saw a significantly reduced reliance on price promotions as demand exceeded our inventory availability. We ultimately lost sales as we sold out on key items in the weeks leading up to Christmas.”
Earnings Call Information:
The Company will host a conference call today, Monday, February 22, beginning at 1:00 pm Eastern time to discuss these results and answer questions. If you would like to participate on the call, please dial (866) 518-6930 and use conference ID: SMDM.
An audio rebroadcast of the call will be available later in the day after the earnings call and can be heard at: www.singingmachine.com/investors.
About The Singing Machine
Based in the U.S., Singing Machine® is the North American leader in consumer karaoke products. The first to provide karaoke systems for home entertainment in the United States, the Company sells its products worldwide through major mass merchandisers and on-line retailers. 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 13,000 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.
Investor Relations Contact:
Brendan Hopkins
(407) 645-5295
investors@singingmachine.com
www.singingmachine.com
www.singingmachine.com/investors
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, 2020. 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.