Fort Lauderdale, FL, Nov. 16, 2020 (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 second quarter ended September 30, 2020.
Second Quarter Snapshot:
- Net sales for the quarter increased by $3.1 million from $20.1 million to $23.2 million (15% increase).
- Gross profit margin increased by 0.9% from 28.1% to 29.0% (increase in gross profit of $1.1 million for the quarter).
- Operating expenses decreased by approximately $0.5 million from $4.8 million to $4.3 million for the quarter.
- During the quarter, the Company recognized a $0.9 million gain in Other Income from the proceeds of the insurance claim.
- Net income for the quarter was $2.4 million compared to $0.6 million in the same period last year (300% increase). Net income through the six-month period increased to $2.2 million compared to a $0.2 million loss over the same period last year.
Singing Machine reports net sales of approximately $23.3 million for the quarter-ended September 30, 2020 period compared to $20.1 million in the comparable quarter of the prior year. The increase in net sales was primarily due to increased demand for the Carpool Karaoke Microphone and extra demand of karaoke product to internet customers.
Gross profit margin increased by 0.9%to 29.0% compared to approximately 28.1% reported in the prior year. The increase in gross margin was mainly due to sales of its new Carpool Karaoke Microphone, which yielded greater margin than the traditional product mix.
Total operating expenses decreased by $0.5 million from $4.8 million in the prior year to $4.3 million for the current quarter. The decrease in expenses was primarily due to lowered marketing expenses and advertising allowances as well as no one-time expenses that were incurred last year as a result of the damaged goods claim. The remaining decrease in expenses was due to a reduction in travel and entertainment expenses associated with restricted travel due to the pandemic.
As a result, the Company reported a net income of $2.4 million compared to net income of $0.6 million in the prior year.
Management Commentary:
Gary Atkinson, Singing Machine CEO, commented, “This was a very strong quarter for Singing Machine. We saw double digit growth in topline sales and strong improvement to gross margin brought about primarily from increased demand for our Carpool Karaoke microphone that went viral over the summer. Further, we have done a tremendous job reducing inventory and turning it into cash, particularly our end-of-life models. All of this has come together to deliver a strong bottom line.”
Bernardo Melo, V.P. of Global Sales & Marketing commented, “The Singing Machine brand continues to be the trusted home karaoke brand for consumers. As the market saw an uptick in home entertainment, our products have exceeded the growth reported by NPD in the youth electronics category. We are also starting to see the beginning of the growth cycle that happens every few years in the Music category that benefits the sales of home karaoke products. We saw success in the category in the spring and summer which are traditionally not high demand times of year for karaoke. One key item that has contributed to that success is our Carpool Karaoke microphone. We experienced tremendous non-seasonal demand and had to rush some re-orders with the manufacturer to catch up with holiday demand. Early forecasts from some our year-round retail partners show that the demand will continue through our fiscal 4th quarter and well into fiscal 2022.”
Earnings Call Information:
The Company will host a conference call today, Monday, November 16, 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 (800) 459-5346 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.