Continued Strong Demand for Industry Leading Product
Fort Lauderdale, FL, Aug. 16, 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 first quarter ended June 30, 2021.
First Quarter Highlights:
- Net sales increased 98% to $6.1 million in the first quarter of fiscal year 2022, as compared to $3.1 million for the same period in the prior year. The sharp increase was largely due to strong spring re-orders and accelerated timing of a large holiday shipment.
- Gross profit for the quarter increased by 66% from $1.0 million to $1.6 million primarily due to the overall increase in net sales. Gross profit margins decreased by 550 basis points largely due to a higher mix of promotional products shipped during the quarter.
- Net operating income was also positively impacted by a one-time gain reported of $0.45 million due to a gain on the forgiveness of indebtedness under the Paycheck Protection Program (PPP) loan.
- Loss Before Income Tax improved to $0.15 million compared to $0.29 million in the prior year due to the increase in net sales and an overall focus on strict cost control.
- Net loss of $0.12 million for the quarter compared to a net loss of $0.21 million in the same period of the prior year.
Singing Machine reported net sales of approximately $6.1 million for the quarter-ended June 30, 2021 period compared to $3.1 million in the same quarter of the prior year. The increase in net sales was primarily due to increased re-orders for spring and accelerated timing on a large promotional order for the holidays. Gross profit increased to $1.6 million for the quarter due to the increase in net sales. Gross profit margin decreased by 550 basis points due to the higher mix of promotional products shipped during the quarter.
Total operating expenses for the quarter increased by $0.3 million to $2.1 million. The majority of the increase is attributable to variable selling expenses that increased commensurate with the overall increase in net sales. As a result, the Company reported a net loss of $0.12 million compared to a net loss of $0.21 million in the same quarter of the prior year.
Management Commentary:
Gary Atkinson, the Company’s CEO, commented, “We’re very proud of the work the team has accomplished during the first quarter. These positive financial and operational results reflect the continued popularity and demand for karaoke and home music entertainment even despite the economy reopening and consumers shifting to spending on services and travel.”
Atkinson added, “Our transformative plans are successfully underway; we recently closed a significant $10 million private placement to inject new capital and expand our shareholder base with new, well-respected U.S.-based investment funds and our strategic content partner, Stingray. All of these moves are part of our broader plan to fuel growth and transform the business to a more integrated hardware-software technology and content-driven model.”
“The widely-publicized global supply chain challenges and logistics delays are leading to longer lead-times and inventory shortages in the market. We believe we are well-positioned to deliver goods for this upcoming season by utilizing our vertically integrated, wholly-owned logistics arm, SMC Logistics. However, we do anticipate increased costs associated with rising freight costs from China and inflationary increases,” concluded Atkinson.
Earnings Call Information:
The Company will host a conference call tomorrow, on Tuesday, August 17, beginning at 9:00 am 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 24,000 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.
