Singing Machine Announces 1st Quarter Earnings Release
FORT LAUDERDALE, Fla., Aug. 9, 2012 /PRNewswire/ -- The Singing Machine Company, Inc. ("Singing Machine" or the "Company") (OTCBB: SMDM) announces the results for its first fiscal quarter ended June 30, 2012.
The Company announced net sales of approximately $1.76 million in the first quarter which is almost identical to the $1.78 million reported for the same period last year. The lack of change in net sales is attributable to the highly seasonal nature of karaoke sales. The Company reported gross margin of approximately 25.2% as compared to approximately 24% reported for the quarter ended June 30, 2011. Due to the slight increase in gross margin, the Company reported a slightly smaller 1st quarter loss of approximately $480,000 as compared to a net loss of approximately $508,000 in the same period last year.
Gary Atkinson, CEO, commented, "Despite our normal, slow seasonal start to the fiscal year, we're confident we can continue the momentum generated from last fiscal year. We're currently preparing all of our fall shipments to start shipping soon and we're hopeful for another strong holiday season." Atkinson added, "Expect to see Singing Machine on the shelves of some new retailers this holiday season."
About The Singing Machine
Incorporated in 1982, The Singing Machine Company develops and distributes a full line of consumer-oriented karaoke machines and music under The Singing MachineTM, SMDigital™, SoundX™, and Sound X Kids™ and other brand names. The first to provide karaoke systems for home entertainment in the United States, The Singing Machine sells its products in North America, Europe and Australia. The Singing Machine is also the first to offer digital music downloads for play on home karaoke machines. See www.singingmachine.com for more details.
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, 2012. 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.
(Financial statements attached)
| The Singing Machine Company, Inc. and Subsidiaries |
||||||
| CONSOLIDATED BALANCE SHEETS |
||||||
| June 30, 2012 |
March 31, 2012 |
|||||
| (Unaudited) |
(Audited) |
|||||
| Assets |
||||||
| Current Assets |
||||||
| Cash and cash equivalents |
$ |
303,420 |
$ |
267,465 |
||
| Accounts receivable, net of allowances of $177,947 and |
||||||
| $168,554, respectively |
799,934 |
785,490 |
||||
| Due from related party - Starlight Consumer Electronics USA, Inc. |
4,574 |
36,036 |
||||
| Due from related party - Starlight Electronics USA, Inc. |
116,286 |
58,536 |
||||
| Due from related party - Cosmo Communications Canada, Ltd |
39,565 |
68,291 |
||||
| Inventories, net |
3,587,715 |
4,008,392 |
||||
| Prepaid expenses and other current assets |
43,434 |
53,233 |
||||
| Total Current Assets |
4,894,928 |
5,277,443 |
||||
| Property and Equipment,net |
306,709 |
296,222 |
||||
| Other Non-Current Assets |
159,956 |
159,674 |
||||
| Total Assets |
$ |
5,361,593 |
$ |
5,733,339 |
||
| Liabilities and Shareholders' Deficit |
||||||
| Current Liabilities |
||||||
| Accounts payable |
$ |
1,545,382 |
$ |
1,303,395 |
||
| Due to related party - Starlight Marketing Development, Ltd. |
1,924,431 |
1,924,431 |
||||
| Due to related party - Ram Light Management, Ltd. |
1,683,247 |
1,683,247 |
||||
| Due to related party - Starlight R&D, Ltd. |
422,106 |
416,026 |
||||
| Due to related party - Cosmo Communications USA, Inc. |
230,626 |
226,747 |
||||
| Due to related party - Starlight Electronics Co., Ltd. |
153,944 |
103,545 |
||||
| Due to related parties - Other Starlight Group Companies |
3,534 |
3,534 |
||||
| Accrued expenses |
207,472 |
168,156 |
||||
| Obligations to clients for returns and allowances |
166,072 |
242,379 |
||||
| Warranty provisions |
61,481 |
219,760 |
||||
| Total Current Liabilities |
6,398,295 |
6,291,220 |
||||
| Total Liabilities |
6,398,295 |
6,291,220 |
||||
| Shareholders' Deficit |
||||||
| Preferred stock, $1.00 par value; 1,000,000 shares authorized, no |
||||||
| shares issued and outstanding |
- |
- |
||||
| Common stock, Class A, $0.01 par value; 100,000 shares |
||||||
| authorized; no shares issued and outstanding |
- |
- |
||||
| Common stock, $0.01 par value; 100,000,000 shares authorized; |
||||||
| 37,960,794 and 37,960,794 shares issued and outstanding, respectively |
379,607 |
379,607 |
||||
| Additional paid-in capital |
19,142,740 |
19,141,098 |
||||
| Accumulated deficit |
(20,559,049) |
(20,078,586) |
||||
| Total Shareholders' Deficit |
(1,036,702) |
(557,881) |
||||
| Total Liabilities and Shareholders' Deficit |
$ |
5,361,593 |
$ |
5,733,339 |
||
| The accompanying notes are an integral part of these consolidated financial statements. |
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| The Singing Machine Company, Inc. and Subsidiaries |
||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
| (Unaudited) |
||||||||
| For Three Months Ended |
||||||||
| June 30, 2012 |
June 30, 2011 |
|||||||
| Net Sales |
$ 1,762,705 |
$ 1,788,046 |
||||||
| Cost of Goods Sold |
1,318,627 |
1,359,503 |
||||||
| Gross Profit |
444,078 |
428,543 |
||||||
| Operating Expenses |
||||||||
| Selling expenses |
248,648 |
348,676 |
||||||
| General and administrative expenses |
643,118 |
555,612 |
||||||
| Depreciation and amortization |
32,775 |
32,078 |
||||||
| Total Operating Expenses |
924,541 |
936,366 |
||||||
| Loss from Operations |
(480,463) |
(507,823) |
||||||
| Other Expenses |
||||||||
| Interest expense |
- |
(94) |
||||||
| Loss before provision for income taxes |
(480,463) |
(507,917) |
||||||
| Provision for income taxes |
- |
- |
||||||
| Net Loss |
$ (480,463) |
$ (507,917) |
||||||
| Loss per Common Share |
||||||||
| Basic and Diluted |
$ (0.01) |
$ (0.01) |
||||||
| Weighted Average Common and Common |
||||||||
| Equivalent Shares: |
||||||||
| Basic and Diluted |
37,960,794 |
37,835,793 |
||||||
| The accompanying notes are an integral part of these consolidated financial statements. |
||||||||
| The Singing Machine Company, Inc. and Subsidiaries |
||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
| (Unaudited) |
||||||||
| For Three Months Ended |
||||||||
| June 30, 2012 |
June 30, 2011 |
|||||||
| Cash flows from operating activities |
||||||||
| Net Loss |
$ |
(480,463) |
$ |
(507,917) |
||||
| Adjustments to reconcile net loss to net cash and cash |
||||||||
| equivalents provided by operating activities: |
||||||||
| Depreciation and amortization |
32,775 |
32,078 |
||||||
| Change in inventory reserve |
(40,709) |
1,004 |
||||||
| Change in allowance for bad debts |
2,143 |
(6,039) |
||||||
| Stock compensation |
1,642 |
7,092 |
||||||
| Warranty provisions |
(158,279) |
(80,690) |
||||||
| Changes in assets and liabilities: |
||||||||
| (Increase) Decrease in: |
||||||||
| Accounts receivable |
(16,587) |
359,502 |
||||||
| Inventories |
461,386 |
39,267 |
||||||
| Prepaid expenses and other current assets |
9,799 |
18,605 |
||||||
| Other non-current assets |
(282) |
- |
||||||
| Increase (Decrease) in: |
||||||||
| Accounts payable |
241,987 |
479,543 |
||||||
| Net due to related parties |
62,796 |
(258,182) |
||||||
| Accrued expenses |
39,316 |
(8,833) |
||||||
| Obligations to clients for returns and allowances |
(76,307) |
87,388 |
||||||
| Net cash provided by operating activities |
79,217 |
162,818 |
||||||
| Cash flows from investing activities |
||||||||
| Purchase of property and equipment |
(43,262) |
(77,301) |
||||||
| Net cash used in investing activities |
(43,262) |
(77,301) |
||||||
| Cash flows from financing activities |
||||||||
| Payments on long-term financing obligation |
- |
(4,547) |
||||||
| Net cash used in financing activities |
- |
(4,547) |
||||||
| Change in cash and cash equivalents |
35,955 |
80,970 |
||||||
| Cash and cash equivalents at beginning of period |
267,465 |
674,712 |
||||||
| Cash and cash equivalents at end of period |
$ |
303,420 |
$ |
755,682 |
||||
| Supplemental Disclosures of Cash Flow Information: |
||||||||
| Cash paid for Interest |
$ |
- |
$ |
94 |
||||
| The accompanying notes are an integral part of these consolidated financial statements. |
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SOURCE The Singing Machine Company, Inc.
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