Singing Machine Reports Third Quarter 2017 Results
(firmenpresse) - FORT LAUDERDALE, FL -- (Marketwired) -- 02/14/17 -- ("Singing Machine" or the "Company") (OTCQX: SMDM) -- the North American leader in consumer karaoke products -- today announced its financial results for its third quarter ended December 31, 2016.
Year-to-date earnings per share of $0.07; EBITDA earnings per share of $0.10.
Gross margin for the quarter improved by 3.8% to 30.9%.
Net sales year-to-date increased 9% to $49.3 million; net sales for the quarter decreased to $16.3 million based primarily on earlier timing of shipments.
Net income before tax for the quarter held approximately the same to $1.9 million, compared to approximately $2.0 million in the same period last year.
Year-to-date net income before tax increased 33% to approximately $4.0 million compared to approximately $3.0 million in the same period last year.
Singing Machine reports net sales of approximately $16.3 million for the quarter-ended December 31, 2016 period, compared to approximately $20.7 million in the same quarter the prior year. The decrease in net sales is primarily due to timing of shipments which occurred earlier this fiscal year than last year, due to more year-round business and earlier retailer demand. Year-to-date net sales increased by 9% to approximately $49.3 million compared to $45.2 million reported in the same period in the prior year. The primary reason for the growth was due to one major retailer carrying a Black Friday promotion as well as expanded growth into the United Kingdom.
Gross profit margin increased by 3.8% from 27.1% to 30.9%. The increase in gross margin was due to cost reductions the Company achieved with its suppliers and better margin on the digital download series of products.
Total operating expenses decreased to approximately $3.0 million compared to $3.4 million in the prior year. The decrease is a result of reduced variable selling expenses associated with the decrease in overall net sales. The balance of the decrease was due to an overall reduction in general and administrative expenses.
Despite the reduction in net sales for the quarter, the Company reported substantially the same income from operations of $1.9 million compared to income from operations of approximately $2.1 million in the same period in the prior year. Pre-tax income held consistent due to the Company reporting higher gross margin of 30.9% compared to 27.1% in the prior year and a reduction in overall operating expenses.
Year-to-date income from operations increased by 33% to approximately $4.0 million compared to approximately $3.0 million in the prior year.
Net income for the quarter decreased by approximately $0.7 million to $1.3 million compared to $2.0 million in the same period last year. The primary reason for the reduction in net income was due to a reversal of an income tax valuation reserve which the Company recognized last year. This year, there was no income tax valuation reversal which resulted in an increase of $0.6 million income tax provision. Net income through the first nine months was $2.7 million compared to approximately $2.6 million over the same period last year, due primarily to the increase in income tax provision.
Gary Atkinson, Singing Machine CEO, commented, "We''re pleased with our year-to-date growth in net sales and pre-tax bottom line. We had a planned reduction in overall 3rd quarter sales, which occurred due to more customers buying year-round and earlier demand from retailers. We anticipate less of a reliance on our third quarter and a healthier balance of sales between quarters as we continue to grow. This fiscal year we''ve grown net sales by 9% over last year and we''ve grown pre-tax net income by 33% to $4.0 million. On the product roadmap, we significantly expanded our distribution of our Digital Download Line of products and saw impressive growth in both downloading and streaming subscriptions."
Bernardo Melo, Vice President of Sales, commented, "The great results reported this year are the result of our expanded retailer distribution both domestically and abroad. We saw tremendous wins in the U.K. where our product was sold out before Christmas. We also had fantastic Black Friday and Christmas successes across all our major retailers with our sell-thru averaging about 88%. Ecommerce also continues to grow significantly year-over-year with ecommerce sales accounting for over 18% of Company sales and our major ecommerce retailer experienced a 40% increase in revenue on Singing Machine sales year-over-year. With many more exciting product releases scheduled and our new Singing Machine Kids line of toy products debuting this year, we look forward to continuing our organic growth strategy domestically and abroad."
The Company will host a conference call today, Tuesday, February 14, 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 (877) 876-9175 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, 2016. 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
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Datum: 14.02.2017 - 08:00 Uhr
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