Fort Lauderdale, FL, July 14, 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 full year financial results for its fiscal year ended March 31, 2021. The Company successfully navigated the COVID-19 global pandemic, capitalizing on strong consumer demand for in-home and mobile karaoke devices. Singing Machine successfully grew market share on its new mobile device, the Carpool Karaoke Microphone, as well as launched a pilot digital content subscription platform on its WiFi-enabled devices. These initiatives, coupled with a strong move to digital marketing and explosive online sales growth drove margin improvement and overall profitability. Additional details for the full year fiscal 2021 are as follows:
Full Year Snapshot:
- Net sales for the fiscal year increased by $7.3 million from $38.5 million to $45.8 million representing an approximate 19% increase over the prior year.
- Gross profit increased to $12.3 million from $8.2 million in the prior year. Gross profit margin increased by 560 basis points from 21.2% to 26.8%.
- Net income for the fiscal year was $2.2 million compared to a loss of $2.9 million in the same period last year, resulting in earnings per share of $0.06 cents.
- Year-end inventory was $5.5 million compared to $7.6 million at the same point last year as the Company successfully managed its supply chain and drove strong sell-through at retail.
Singing Machine reported net sales of approximately $45.8 million for the fiscal year ended March 31, 2021 period compared to $38.5 million in the prior fiscal year. The increase in net sales was primarily due to overall increased demand for karaoke products, most notably the Carpool Karaoke Microphone which contributed to 37% of the increase. Increased demand for karaoke products led to an increase of $2.0 million in retail product sell-through compared to the prior year. The Company also saw a reduction in promotional discounts of approximately $0.9 million which indicated an increased willingness of consumers to pay full price for products.
Gross profit margins increased 560 basis points to 26.8% compared to approximately 21.2% reported in the prior fiscal year. The increase in gross margin was in part due to overall product margin expansion of approximately 230 basis points as well as a reduction in sales promotions which contributed the remaining 330 basis points to gross margin improvement.
Total operating expenses decreased by $0.5 million from $11.4 million in the prior year to $10.9 million. The decrease in expenses was primarily due to reduced selling expenses for marketing related programs and a decrease in bad debt.
As a result, the Company reported net income for the year of $2.2 million (or $.06 cents per fully diluted share) compared to a net loss of $2.9 million in the prior year.
Management Commentary:
Gary Atkinson, Singing Machine CEO, commented, “During a very difficult 2020 year, we are thrilled that families and communities looked to karaoke to provide joy and entertainment for their homes. We are proud that Singing Machine was the trusted brand that consumers eagerly turned to during the global pandemic.”
“Through the hard work of our global team, I am proud to announce that we delivered strong results in all key areas of the business with significant top-line growth, margin expansion, and reduced expenses which led to strong operating income and EBITDA.” Atkinson added, “During the year, our focus was conserving cash, optimizing our working capital and ending the year with reduced inventory, which we successfully accomplished as we converted an additional $2.2 million of inventory to cash compared to the prior year.
“Our momentum was driven by the quality and value of our product lines as well as world-class logistics capabilities that supported our omni-channel sales approach. We were able to deliver product to all of our retail partner channels quickly and cost-effectively. We also saw several key technology driven initiatives gain traction during the fiscal year. Our Carpool Karaoke Microphone was a tremendous success, reinforcing our belief that there is strong demand for in-car singing entertainment. Further, our new integrated digital music subscription platform saw healthy adoption rates, reinforcing our belief that there is demand for subscription-based quality karaoke music content.”
Mr. Atkinson concluded, “As a result of these efforts, new products and technology driven initiatives, we are pleased to report over 100% year over year sales growth online and at certain mass market retailers. We built strong momentum during the global pandemic and we look forward to providing additional updates on further corporate initiatives to shareholders soon.”
Earnings Call Information:
The Company will host a conference call today, Wednesday, July 14, beginning at 3:00 pm Eastern time to discuss these results and answer questions. If you would like to participate on the call, please dial (877) 876-9173 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, 2021. 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.