- Revenues for the 3 months ended
September 30, 2023 were$15.9 million , as compared to$17.1 million for the same period in the prior year. The$1.2 million (7.0%) decrease was largely due to a backlog of orders late in the quarter that moved into early third quarter and a$0.9 million co-op incentive accrual for planned holiday promotions. - Gross margins were 23.2% for the three-months ended
September 30, 2023 , as compared to 22.5% for the same period in the prior year. The slight improvement was largely the result of changes to newer, higher-margin yielding product mix and a significant reduction in ocean container prices that lowered the Company’s cost of inbound freight. - Operating expenses were
$3.6 million for the three-months endedSeptember 30, 2023 , as compared to$3.3 million for the same period in the prior year. The$0.3 million (9.0%) increase was in part due to approximately a$0.2 million increase in selling expenses, and approximately a$0.1 million increase in general and administrative expenses. - The Company generated a net income of
$0.1 million for the three months endedSeptember 30, 2023 , as compared to$0.6 million . The decrease in profitability was in part due to lower sales, and in part to the modest increase in operating expenses for the quarter. - The Company continued to maintain a conservatively capitalized balance sheet with
$3.2 million cash on hand, a positive working capital position of approximately$8.7 million and no material debt as ofSeptember 30, 2023 .
“Overall, I feel the Company is weathering the general headwinds facing the US retail environment very well. We have maintained all of our shelf space with our big box retailers, anticipated changes in retail demand, managed inventory down by
“This quarter we were also very active delivering new products to the market, which have been well-received as we gear up our marketing efforts for the upcoming buying season with our global retail partners in early 2024. We are looking to finish the current holiday season with strength and focus, and I personally look forward to providing further updates to all shareholders soon,” concluded
Earnings Call Information:
The Company will host a conference call today,
An audio rebroadcast of the call will be available later in the day after the earnings call and can be heard at: www.singingmachine.com/investors.
About
Investor Relations Contact:
investors@singingmachine.com
www.singingmachine.com
www.singingmachine.com/investors
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
CONDENSED CONSOLIDATED BALANCE SHEETS
2023 | 2023 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current Assets | ||||||||
Cash | $ | 3,212,564 | $ | 2,894,574 | ||||
Accounts receivable, net of allowances of | 10,901,701 | 2,075,086 | ||||||
Due from banks | 152,148 | - | ||||||
Accounts receivable related parties | 164,923 | 239,078 | ||||||
Inventories | 13,042,627 | 9,639,992 | ||||||
Prepaid expenses and other current assets | 303,342 | 350,735 | ||||||
Total Current Assets | 27,777,305 | 15,199,465 | ||||||
Property and equipment, net | 457,173 | 633,207 | ||||||
Operating leases - right of use assets | 4,002,595 | 561,185 | ||||||
Other non-current assets | 346,239 | 254,740 | ||||||
Total Assets | $ | 32,583,312 | $ | 16,648,597 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 12,526,485 | $ | 1,769,348 | ||||
Accrued expenses | 2,747,502 | 2,265,424 | ||||||
Prepaids from customers | 1,305,271 | 583,323 | ||||||
Reserve for sales returns | 2,289,251 | 900,000 | ||||||
Other current liabilities | 84,253 | 98,957 | ||||||
Current portion of operating lease liabilities | 112,647 | 508,515 | ||||||
Total Current Liabilities | 19,065,409 | 6,125,567 | ||||||
Other liabilities, net of current portion | 14,844 | 103,997 | ||||||
Operating lease liabilities, net of current portion | 3,825,115 | 87,988 | ||||||
Total Liabilities | 22,905,368 | 6,317,552 | ||||||
Commitments and Contingencies | - | - | ||||||
Shareholders’ Equity | ||||||||
Preferred stock, | - | - | ||||||
Common stock | 42,203 | 31,675 | ||||||
Additional paid-in capital | 31,514,831 | 29,822,205 | ||||||
Subscriptions receivable | - | (5,891 | ) | |||||
Accumulated deficit | (21,879,090 | ) | (19,516,944 | ) | ||||
Total Shareholders’ Equity | 9,677,944 | 10,331,045 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 32,583,312 | $ | 16,648,597 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
$ | 15,930,563 | $ | 17,113,636 | $ | 18,555,566 | $ | 28,805,690 | |||||||||
Cost of Goods Sold | 12,196,677 | 13,260,617 | 13,972,830 | 21,863,138 | ||||||||||||
Gross Profit | 3,733,886 | 3,853,019 | 4,582,736 | 6,942,552 | ||||||||||||
Operating Expenses | ||||||||||||||||
Selling expenses | 1,169,088 | 899,590 | 1,614,362 | 1,504,787 | ||||||||||||
General and administrative expenses | 2,458,848 | 2,368,778 | 5,293,160 | 4,706,272 | ||||||||||||
Total Operating Expenses | 3,627,936 | 3,268,368 | 6,907,522 | 6,211,059 | ||||||||||||
Income (Loss) from Operations | 105,950 | 584,651 | (2,324,786 | ) | 731,493 | |||||||||||
Other (Expenses) Income | ||||||||||||||||
Gain on disposal of fixed assets | 44,296 | - | 44,296 | - | ||||||||||||
Interest expense | (52,711 | ) | (185,827 | ) | (81,656 | ) | (353,753 | ) | ||||||||
Total (Expenses) income, net | (8,415 | ) | (185,827 | ) | (37,360 | ) | (353,753 | ) | ||||||||
Income (Loss) Before Income Tax Benefit | 97,535 | 398,824 | (2,362,146 | ) | 377,740 | |||||||||||
Income Tax Benefit | - | (102,357 | ) | - | (97,276 | ) | ||||||||||
Net Income (Loss) | $ | 97,535 | $ | 296,467 | $ | (2,362,146 | ) | $ | 280,464 | |||||||
Net Income (Loss) per Common Share | ||||||||||||||||
Basic | $ | 0.02 | $ | 0.10 | $ | (0.58 | ) | $ | 0.11 | |||||||
Diluted | $ | 0.02 | $ | 0.08 | $ | (0.58 | ) | $ | 0.09 | |||||||
Weighted Average Common and Common Equivalent Shares: | ||||||||||||||||
Basic | 4,220,259 | 3,071,131 | 4,063,697 | 2,484,660 | ||||||||||||
Diluted | 4,220,259 | 3,610,188 | 4,063,697 | 2,961,631 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities | ||||||||
Net (loss) income | $ | (2,362,146 | ) | $ | 280,464 | |||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
Depreciation | 234,448 | 120,390 | ||||||
Change in inventory reserve | 132,386 | 466,000 | ||||||
Change in allowance for bad debts | 77,426 | 155,403 | ||||||
Gain from disposal of property and equipment | (44,296 | ) | - | |||||
Stock based compensation | 99,259 | 231,213 | ||||||
Amortization of right of use assets | 433,086 | 417,068 | ||||||
Deferred taxes | - | 80,081 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (8,904,041 | ) | (8,011,050 | ) | ||||
Due from banks | (152,148 | ) | (976,166 | ) | ||||
Accounts receivable - related parties | 74,155 | 70,547 | ||||||
Inventories | (3,535,021 | ) | (2,326,800 | ) | ||||
Prepaid expenses and other current assets | 47,393 | 193,984 | ||||||
Other non-current assets | (91,499 | ) | (107,400 | ) | ||||
Accounts payable | 10,757,137 | 4,742,478 | ||||||
Accrued expenses | 482,078 | 811,932 | ||||||
Refunds due to customers | 721,948 | (4,043 | ) | |||||
Reserve for sales returns | 1,389,251 | 700,606 | ||||||
Operating lease liabilities | (533,237 | ) | (424,912 | ) | ||||
Net cash used in operating activities | (1,173,821 | ) | (3,580,205 | ) | ||||
Cash flows from investing activities | ||||||||
Purchase of property and equipment | (67,978 | ) | (87,801 | ) | ||||
Disposal of property and equipment | 53,860 | - | ||||||
Net cash used in investing activities | (14,118 | ) | (87,801 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from issuance of stock, net of offering costs | 1,603,895 | 3,362,750 | ||||||
Collection of subscriptions receivable | 5,891 | - | ||||||
Payments on installment notes | (103,857 | ) | (36,372 | ) | ||||
Proceeds from exercise of common stock warrants | - | 865,203 | ||||||
Proceeds from exercise of pre-funded warrants | - | 168,334 | ||||||
Payments on finance leases | - | (3,709 | ) | |||||
Net cash provided by financing activities | 1,505,929 | 4,356,206 | ||||||
Net change in cash | 317,990 | 688,200 | ||||||
Cash at beginning of year | 2,894,574 | 2,290,483 | ||||||
Cash at end of period | $ | 3,212,564 | $ | 2,978,683 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest | $ | 6,280 | $ | 331,225 | ||||
Right of use assets exchanged for lease liabilities | $ | 3,874,496 | $ | - |
Source:
2023 GlobeNewswire, Inc., source