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Singing Machine Reports Fiscal 2017 Annual Earnings Report

ID: 1511603
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(businesspress24) - FORT LAUDERDALE, FL -- (Marketwired) -- 06/29/17 -- ("Singing Machine" or the "Company") (OTCQX: SMDM) -- the North American leader in consumer karaoke products -- today announced its financial results for its full fiscal year ended March 31, 2017.

$0.04 earnings per share; EBITDA earnings per share of $0.07 on a fully diluted basis.

Net sales for the fiscal year increased by 8% to $52.9 million.

Gross margin for the year improved by 1.7% to 26.1%.

Net income before tax for the fiscal year increased by $1.1 million (or 70%) to $2.7 million.

Net income for the fiscal year of $1.7 million.

Paid down approximately $1.1 million in related party debt.

80% YoY increase in digital music sales.

Singing Machine reports net sales of approximately $52.9 million for the March 31, 2017 fiscal year-end period, compared to approximately $48.9 million in the prior year. The increase in net sales is primarily due to an increase in sales to three of the Company''s top retailers and an increase in on-line shopping. Some of the increase was also attributable to increased demand for product internationally.

Gross profit margin increased by 1.7% from 24.4% to 26.1%. As a result, gross profit increased to $13.8 million compared to $11.9 million in the prior year. The increase in gross margin was due to increased profit margins on the digital download product line compared to the margin on the Classic karaoke line.

Total operating expenses increased from $10.0 million in the prior year to approximately $10.9 million for Fiscal 2017. The increase was partially attributable to variable selling expense commensurate with the increase in net sales and partially caused by an increase in general & administrative expenses.

As a result of the above, net income before tax increased by 70% to $2.7 million (or $0.07 cents per share) compared to $1.6 million ($0.04 cents per share) in the prior year. The Company recognized an income tax provision of $1.0 million based on an effective tax rate of 34.1%. The Company still retains approximately $1.5 million in deferred tax assets going forward. Net income for the fiscal year remained at $1.7 million compared to the prior year, which is primarily due to the $1.0 million income tax provision recognized this year as compared to a $0.1 million tax benefit recognized last year due to a reversal of a deferred tax asset valuation reserve of $0.7 million.

Gary Atkinson, Singing Machine CEO commented, "Fiscal 2017 marks six consecutive years of increased profits and growth. We''re excited with the results, particularly, we saw an 8% growth in overall net sales yet we drove a 70% increase to our pre-tax net income, resulting in $0.07 cents per share in pre-tax earnings. This was the result of increasing overall margin while holding our expenses relatively flat." Atkinson added, "As we move into our new fiscal year, we remain heavily optimistic about our ability to continue to grow hardware sales both domestically and abroad, while continuing to expand our recurring revenue stream with music sales and subscriptions."

Bernardo Melo, Vice President of Sales, commented, "We are feeling the positive effects of the strong demand for karaoke and the Singing Machine brand that is opening up doors to new retail partners domestically and internationally. We just signed up a new major retailer in the U.S. for karaoke and our new toy line of products are gaining traction with new and existing customers. We''re excited to start shipping our toy products now for the fall."

Melo added, "Additionally, as e-commerce grows, we are well positioned to grow with it. Last year, our e-commerce sales grow over 40% year-over-year with e-commerce now accounting for over 20% of Company sales. As we move into Fiscal 2018, we enter the year with strong momentum, increasing demand and order commitments, and a roadmap of upcoming product innovations and new product releases to announce."

The Company will host a conference call today, Thursday, June 29, beginning at 10:00 am Eastern time to discuss these results and answer questions. If you would like to participate on the call, please dial 866-342-8591 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: .

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 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, 2017. 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.

Brendan Hopkins

(407) 645-5295

More information: http:// http:// http://www

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Date: 06/29/2017 - 11:00
Language: English
News-ID 1511603
Character count: 4033
Firma: The Singing Machine Company, Inc.
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