Fort Lauderdale, FL, Aug. 13, 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 full fiscal year ended March 31, 2020.
Full Fiscal 2020 Highlights:
- Net sales for the fiscal year of $41.4 million.
- Gross profit of $11.0 million or 26.6% of total revenue compared to 25.3% in the prior year.
- Operating Expenses increased by $3.6 million to $14.3 million.
- Net loss of approximately $2.8 million.
Singing Machine reports net sales of approximately $41.4 million for the March 31, 2020 fiscal year-end period, compared to approximately $46.5 million in the prior year. The decrease in net sales is primarily due to a loss of sales due to moisture damage that occurred to a large shipment to a major customer as well as a decrease in sales to UK and Canada territories.
Gross profit margin improved to 26.6% from 25.3% in the prior year. The increase in gross profit margin was due to improved margin from sales of Carpool Karaoke Microphones.
Total operating expenses increased to $14.3 million, an increase of $3.6 million from the prior year. The increase was primarily due to expenses associated with the damaged goods incident which resulted in one-time expenses of approximately $1.0 million for freight, storage, and destruction of the goods. Selling expenses increased by $1.3 million from additional promotional advertising spend for holidays and the marketing roll-out and royalties for the Carpool Karaoke Mic.
As a result of the above, income from operations was a net loss of approximately $3.5 million and a net loss of approximately $2.8 million.
Gary Atkinson, Singing Machine CEO commented, “We faced a significant number of one-time challenges last fiscal year – namely the damaged goods claim, supply chain disruptions and tariffs caused by the U.S./China trade war, and an aggressive marketing/promotional spend on rolling out our new Carpool Karaoke Microphone and other products during the holidays. However, many of these one-time challenges have since been favorably resolved. We received over $2.3 million on the damaged goods insurance claim, representing 98% of the total claim amount, and our Carpool Karaoke Microphone has become the new, hot item of the summer.”
Atkinson added, “The pandemic has created a strong demand for at-home entertainment. Sales of our karaoke products have been performing strongly since many states implemented stay-at-home orders. Consumers are looking for fun, engaging activities to do at home and karaoke makes the perfect activity.”
Earnings Call Information:
The Company will host a conference call 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.
For access to accompanying financial statements click here.
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 internationally. See www.singingmachine.com for more details.
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, 2019. 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.
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