Singing Machine Announces Results of Operations for First Quarter of Fiscal 2024


Fort Lauderdale, FL, Aug. 18, 2023 (GLOBE NEWSWIRE) — The Singing Machine Company, Inc. (“Singing Machine” or the “Company”) (NASDAQ: MICS) — the worldwide leader in consumer karaoke products — today released its results of operations for the three months ended June 30, 2023. Financial highlights are as follows:

  • Revenues for the three months ended June 30, 2023 were $2.6 million, as compared to $11.7 million for the same period in the prior year. The $9.1 million decrease was largely due to the distortive effects of $6.7 million in purchase orders from Walmart and Sam’s Club in the first quarter of the prior year.
  • These orders were in part due to the launch of Singing Machine products in the Walmart Consumer Electronics department in mid-2022, and a direct import shipment that accelerated revenues normally booked in the second quarter into the tail end of our first quarter of fiscal 2022. Overall, first quarter of fiscal 2024 sales were consistent with the Company’s historical record for customer purchases.
  • Gross margins improved to 32.3% for the first quarter of fiscal 2024, as compared to 27.2% for the same period in the prior year. The improvement was largely the result of more sales of higher margin products and efficiencies in shipping that resulted in slightly lower overall shipping expenses.
  • Operating expenses were $3.3 million for the three months ended June 30, 2023, as compared to $3.0 million for the same period in the prior year. The increase was almost entirely due to a $0.3 million one-time expense relating to the closure of the Company’s logistics facility in Ontario, CA. The Company has migrated to an outsourced third-party logistics warehouse that is expected to covert fixed annual overhead expenses to variable expenses and help insulate the Company from rising occupancy and labor costs in the southern California market.
  • The Company maintained a strong balance sheet with $8.6 million in working capital as of June 30, 2023. Cash on hand was $1.9 million, and additional $2.0 million was available under a revolving credit agreement as of June 30, 2023.

Management Commentary:


Gary Atkinson, Singing Machine’s Chief Executive Officer, commented, “During this first quarter we saw our supply-chain normalizing back to pre-pandemic levels. Due to the improvement in production and transportation lead-times we are seeing a timing shift from our retail partners back to just-in-time ordering. We believe this will produce more accurate buying commitments from our retail partners which we anticipate will lower the need to provide markdown incentives or other frictional costs that detract from sales and gross margins.”

“In contrast, during the same period last year, supply chain interruptions resulted in extended lead-times, forcing retailers to accelerate their order timing to ship earlier during our first quarter. Additionally, during the same quarter last year, we celebrated opening a new major department within Walmart stores which resulted in a heavy front loading of inventory to set all of the stores.” 

Atkinson continued, “Despite the timing of shipments returning to the traditional second fiscal quarter, our view on the upcoming holiday retail season remains optimistic. All of our existing retail customers have committed to karaoke programs for this holiday season and we will be launching at least five new, innovative karaoke products this fall. We are generally pleased with the purchase orders received and the timing and schedule of delivery for product shipments.”

Earnings Call Information:

The Company will host a conference call today, Friday, August 18, 2023, beginning at 5:00 PM Eastern time to discuss these results and answer questions. If you would like to participate on the call, please dial (800) 225-9448 and use conference ID: MICS.

About The Singing Machine

The Singing Machine Company, Inc. (NASDAQ: MICS) is the worldwide leader in consumer karaoke products. Based in Fort Lauderdale, Florida, and founded over forty years ago, the Company designs and distributes the industry’s widest assortment of at-home and in-car karaoke entertainment products. Their portfolio is marketed under both proprietary brands and popular licenses, including Carpool Karaoke and Sesame Street. Singing Machine products incorporate the latest technology and provide access to over 100,000 songs for streaming through its mobile app and select WiFi-capable products and is also developing the world’s first globally available, fully integrated in-car karaoke system. The Company also has a new philanthropic initiative, CARE-eoke by Singing Machine, to focus on the social impact of karaoke for children and adults of all ages who would benefit from singing. Their products are sold in over 25,000 locations worldwide, including Amazon, Costco, Sam’s Club, Target, and Walmart. To learn more, go to

Investor Relations Contact:
[email protected]

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “may”, “could”, “expects”, “projects,” “intends”, “plans”, “believes”, “predicts”, “anticipates”, “hopes”, “estimates” and variations of such words and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks and are based upon several assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the Company’s control. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the risk factors described in the Company’s filings with the Securities and Exchange Commission. The forward-looking statements are applicable only as of the date on which they are made, and the Company does not assume any obligation to update any forward-looking statements.

The Singing Machine Company, Inc. and Subsidiaries

    June 30, 2023     March 31, 2023  
Current Assets                
Cash   $ 1,890,014     $ 2,894,574  
Accounts receivable, net of allowances of $146,315 and $165,986, respectively     713,152       2,075,086  
Accounts receivable related party – Stingray Group, Inc.     174,853       218,328  
Accounts receivable related party – Ault Alliance, Inc.     20,750       20,750  
Inventories, net     10,607,610       9,639,992  
Prepaid expenses and other current assets     473,277       266,068  
Deferred financing costs     84,667       84,667  
Total Current Assets     13,964,323       15,199,465  
Property and equipment, net     492,253       633,207  
Deferred financing costs, net of current portion     109,361       130,528  
Operating leases – right of use assets     331,878       561,185  
Other non-current assets     124,201       124,212  
Total Assets   $ 15,022,016     $ 16,648,597  
Liabilities and Shareholders’ Equity                
Current Liabilities                
Accounts payable   $ 2,644,691     $ 1,769,348  
Accrued expenses     1,294,794       2,265,424  
Refunds due to customers     670,699       583,323  
Reserve for sales returns     331,754       900,000  
Current portion of finance leases     18,531       18,162  
Current portion of installment notes     82,506       80,795  
Current portion of operating lease liabilities     277,733       508,515  
Total Current Liabilities     5,320,708       6,125,567  
Finance leases, net of current portion     41,369       46,142  
Installment notes, net of current portion     36,575       57,855  
Operating lease liabilities, net of current portion     78,809       87,988  
Total Liabilities     5,477,461       6,317,552  
Commitments and Contingencies                
Shareholders’ Equity                
Preferred stock, $1.00 par value; 1,000,000 shares authorized; no shares issued and outstanding            
Common stock $0.01 par value; 100,000,000 shares authorized; 4,220,259 and 3,184,439 shares issued, 4,220,259 and 3,167,489 shares outstanding, respectively     42,203       31,675  
Additional paid-in capital     31,478,977       29,822,205  
Subscriptions receivable           (5,891 )
Accumulated deficit     (21,976,625 )     (19,516,944 )
Total Shareholders’ Equity     9,544,555       10,331,045  
Total Liabilities and Shareholders’ Equity   $ 15,022,016     $ 16,648,597  

See notes to the condensed consolidated financial statements

The Singing Machine Company, Inc. and Subsidiaries

    For the Three Months Ended  
    June 30, 2023     June 30, 2022  
Net Sales   $ 2,625,003     $ 11,692,054  
Cost of Goods Sold     1,776,153       8,511,524  
Gross Profit     848,850       3,180,530  
Operating Expenses                
Selling expenses     445,274       605,197  
General and administrative expenses     2,650,858       2,370,424  
Depreciation     183,454       58,067  
Total Operating Expenses     3,279,586       3,033,688  
(Loss) Income from Operations     (2,430,736 )     146,842  
Other Expenses                
Interest expense     (7,778 )     (160,113 )
Finance costs     (21,167 )     (7,813 )
Total Other Expenses     (28,945 )     (167,926 )
Loss Before Income Tax Benefit     (2,459,681 )     (21,084 )
Income Tax Benefit           5,081  
Net Loss   $ (2,459,681 )   $ (16,003 )
Net Loss per Common Share                
Basic and Diluted   $ (0.64 )   $ (0.01 )
Weighted Average Common and Common Equivalent Shares:                
Basic and Diluted     3,872,447       1,911,485  

See notes to the condensed consolidated financial statements

The Singing Machine Company, Inc. and Subsidiaries

    For the Three Months Ended  
    June 30, 2023     June 30, 2022  
Cash flows from operating activities                
Net Loss   $ (2,459,681 )   $ (16,003 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation     183,454       58,067  
Amortization of deferred financing costs     21,167       7,813  
Change in inventory reserve     132,386        
Change in allowance for bad debts     (19,671 )     138,237  
Stock based compensation     63,406       35,565  
Change in net deferred tax assets           (5,081 )
Changes in operating assets and liabilities:                
Accounts receivable     1,381,605       (7,001,987 )
Due from banks           (340,810 )
Accounts receivable – related parties     43,475       (90,043 )
Inventories     (1,100,004 )     1,205,145  
Prepaid expenses and other current assets     (207,209 )     113,473  
Other non-current assets     11       3,032  
Accounts payable     875,343       1,390,942  
Accrued expenses     (970,630 )     447,566  
Refunds due to customers     87,376       16,034  
Reserve for sales returns     (568,246 )     (108,341 )
Operating lease liabilities, net of operating leases – right of use assets     (10,654 )     (2,913 )
Net cash used in operating activities     (2,547,872 )     (4,149,304 )
Cash flows from investing activities                
Purchase of property and equipment     (42,500 )     (21,801 )
Net cash used in investing activities     (42,500 )     (21,801 )
Cash flows from financing activities                
Proceeds from issuance of stock – net of transaction expenses     1,603,894       3,362,750  
Collection of subscriptions receivable     5,891        
Payments on installment notes     (19,569 )     (17,995 )
Proceeds from exercise of common stock warrants           647,422  
Proceeds from exercise of pre-funded warrants           168,334  
Payments on finance leases     (4,404 )     (1,832 )
Net cash provided by financing activities     1,585,812       4,158,679  
Net change in cash     (1,004,560 )     (12,426 )
Cash at beginning of period     2,894,574       2,290,483  
Cash at end of period   $ 1,890,014     $ 2,278,057  
Supplemental disclosures of cash flow information:                
Cash paid for interest   $ 6,280     $ 158,490  

See notes to the condensed consolidated financial statements

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