Fort Lauderdale, FL, Aug. 19, 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 first quarter ended June 30, 2020.
First Quarter Snapshot:
- Net sales decreased to $3.3 million due to timing of a large promotional shipment that was delayed due to COVID-19.
- Regular non-promotional sales increased by $1.8 million (125%) compared to the same period last year.
- Gross margin increased by 15.8 margin points to 37.1% compared to 21.3% in the prior year.
- Gross Profit improved to $1.2 million for the quarter.
- Recovery of $0.5 million due to settlement of damaged goods claim from prior year.
- Loss Before Income Tax of $0.29 million compared to $1.1 million in the prior year.
- Net loss of $0.2 million for the quarter or $0.01 per diluted share.
Singing Machine reported net sales of approximately $3.3 million for the quarter-ended June 30, 2020 period compared to $4.8 million in the same quarter of the prior year. The decrease in net sales was primarily due to delayed shipments of goods to a major retailer for its upcoming holiday promotions. However, the Company reported an increase of $1.8 million in regular, non-promotional sales during the first quarter which drove the gross margin increase to 37.1% (increase of 15.8 margin points compared to the prior year).
Under Other Income, the Company reported approximately $0.52 million gain in income from settlements of the insurance claim from the damaged goods shipment in the prior year. The Company anticipates recognizing another $0.85 million gain in the second quarter ended September 30, 2020 due to the timing of receipt of the insurance settlement.
Total operating expenses held flat at approximately $2.0 million for the quarter.
As a result, the Company reported a loss before income tax of $0.29 million compared to a net loss before income tax of $1.1 million in the prior year.
Management Commentary:
Gary Atkinson, Singing Machine CEO, commented, “We’re thrilled with the results of the first quarter. During the pandemic, consumer spending habits shifted dramatically to stay-at-home entertainment where we saw significant growth in karaoke sales. Many of our major retailers reported 50% to 100% year-over-year growth in karaoke. That rising demand generated new and replenishment orders by more than 125% over last year, which helped drive margin growth by almost 16%. Digital sales remained very strong, contributing over 200% increase in unit sales YoY.” Atkinson added, “We’re also excited at the ongoing momentum behind our Carpool Karaoke Microphone which has exploded all over social media as the hot summer must-have item.”
Earnings Call Information:
The Company will host a conference call today, on Wednesday, August 19, beginning at 4:00 pm Eastern time to discuss these results and answer questions. If you would like to participate on the call, please dial 877-876-9176 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.