Dallas, Texas (August 11, 2011) – StockGuru Shines its Spotlight on The Singing Machine Company, Inc. (OTCBB: SMDM) which announced yesterday the results for its first fiscal quarter ended June 30, 2011. The Company closed on August 10, 2011, at $0.02, trading in a fifty-two week range of $0.09 – 0.02.
The Company announced net sales of approximately $1.78 million in the first quarter as compared with approximately $2.09 million over the same period last year (decrease of approximately 14.8%). The decrease in net sales is primarily a result of the Company taking a risk-adverse approach to carrying inventory in the first quarter. As a result of lack of inventory, the Company had to cancel some orders. The Company reported gross margin of approximately 24% as compared to approximately 27.5% in the same period of the prior year. This decline in gross margin is attributable to the Company offering aggressive pricing to European customers to grow its international distribution.
During the first quarter, selling expenses increased by approximately 7.6% as compared to the same period last year as the Company reached a cash settlement with MGA Entertainment, Inc. regarding their respective lawsuits against each other involving the “Bratz” license. Despite this, the Company reported Total Operating Expenses of approximately $936,000, a decline of approximately $100,000 as compared to the same period last year. As a result of reduced sales, the MGA settlement, and lower gross margin, the Company reported a net loss of approximately $500,000, a slight increase over last year’s first quarter net loss of $470,000.
“Despite the slow first quarter, we feel confident about this fiscal-year,” commented Gary Atkinson, Interim CEO. “This year Singing Machine will be coming out with thirteen new items for the fall. Due to this large investment in new product, we will be able to offer a broad and diverse product line-up to our growing distribution channels.” Atkinson added, “We believe we are well-positioned to grow our market share this year.”
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 Machine™, 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.
This press release contains forwardlooking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forwardlooking 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, 2011. You should review our risk factors in our SEC filings which are incorporated herein by reference. Such forwardlooking statements speak only as of the date on which they are made and the company does not undertake any obligation to update any forwardlooking statement to reflect events or circumstances after the date of this release.
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