-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lq/JkQqKcZkwc6lDIA6Uds/GPHyXVDPS/dTNuRwBfa261SjjT7ohgE5XGKSzMNtP KoEYHVN1LqkGhHDpLSrK4w== 0001116502-04-000257.txt : 20040217 0001116502-04-000257.hdr.sgml : 20040216 20040217061348 ACCESSION NUMBER: 0001116502-04-000257 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040213 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040217 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SINGING MACHINE CO INC CENTRAL INDEX KEY: 0000923601 STANDARD INDUSTRIAL CLASSIFICATION: PHONOGRAPH RECORDS & PRERECORDED AUDIO TAPES & DISKS [3652] IRS NUMBER: 953795478 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24968 FILM NUMBER: 04602154 BUSINESS ADDRESS: STREET 1: 6601 LYONS ROAD STREET 2: BLDG A-7 CITY: COCONUT CREEK STATE: FL ZIP: 33073 BUSINESS PHONE: 9545961000 MAIL ADDRESS: STREET 1: 6601 LYONS ROAD BLDG CITY: COCONUT CREEK STATE: FL ZIP: 33073 8-K 1 singingmachine-8k.txt CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ------------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): Feburary 13, 2004 THE SINGING MACHINE COMPANY, INC. ------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware ------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 0-24968 95-3795478 - ----------------------------------- ---------------------------------------- (Commission File Number) (IRS Employer Identification No.) 6601 Lyons Road, Bldg. A-7 Coconut Creek, FL 33073 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (954) 596-1000 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- (Former Name or Former Address, if Change Since Last Report) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. 99.1 The Singing Machine Company, Inc. Press Release dated February 13, 2004 ITEM 9. REGULATION FD DISCLOSURE On February 13, 2004, The Singing Machine Company, Inc. (the "Company") issued a press release commenting on its financial results for the nine months ended December 31, 2003. The information contained in this Report on Form 8-K is furnished pursuant to Item 12 (Results of Operation and Financial Condition). Copies of the press release issued on February 13, 2004 is attached hereto as Exhibit 99.1. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized. THE SINGING MACHINE COMPANY, INC. Date: February 13, 2004 By: /s/ April Green ------------------------------------ April Green Chief Financial Officer EXHIBIT INDEX Exhibit No. Description 99.1 Press Release of The Singing Machine Company, Inc. dated February 13, 2004 EX-99.1 3 earnings.txt PRESS RELEASE [SINGING MACHINE LOGO OMITTED] INVESTOR CONTACT: COMPANY CONTACT: Neil Berkman Y.P. Chan Berkman Associates Interim Chief Executive Officer (310) 277 - 5162 (954) 596 - 1000 info@BerkmanAssociates.com www.SingingMachine.com FOR IMMEDIATE RELEASE THE SINGING MACHINE COMPANY REPORTS THIRD QUARTER AND NINE MONTH RESULTS COCONUT CREEK, FL, February 13, 2004 THE SINGING MACHINE COMPANY (AMEX: SMD) announced today that revenue for the third quarter of fiscal 2004 ended December 31, 2003 declined as anticipated to $28,689,623 from $45,659,446 for the third quarter of fiscal 2003. The net loss for this year's third quarter was $10,450,601, or $1.20 per share, which included non-cash inventory and other write-downs of $6.2 million. This compares to net income for last year's third quarter of $3,320,527, or $0.37 per diluted share. For the nine months ended December 31, 2003, revenue declined to $68,053,739 from $81,915,443 for the same period last year. The net loss for the first nine months of fiscal 2004 was $13,424,622, or $1.58 per share. This compares to net income of $5,957,136, or $0.67 per diluted share, for the first nine months of fiscal 2003. OPERATIONS REVIEW Interim Chief Executive Officer Y.P. Chan said, "Fiscal 2004 has been a difficult year for The Singing Machine. We are focusing on moving the remaining inventory to our existing customers and other channels and launching our new products." Chan continued, "We are working hard to reduce costs. We recently renegotiated our licensing agreement with one of our partners to reduce the guaranteed portion of the licensing fee, and have subleased some of our excess warehouse space. In addition, we have cut our work force and reduced salaries to better align our cost structure with our new business model. "We cannot rebuild this company by cost cutting alone, and we are taking actions to set the stage for recovery. Our international sales increased from $14.4 million for the first nine months of fiscal 2003 to $28.9 million for the first nine months ended December 31, 2003. We will continue to try to expand our international business by looking into other countries to increase our international sales. "We introduced an entirely new product line at the Consumer Electronic Show in Las Vegas in January, and have applied for both utility and design patents to protect our intellectual property rights in these new products. (more) THE SINGING MACHINE COMPANY REPORTS THIRD QUARTER AND NINE MONTH RESULTS February 13, 2004 Page Two "On the music software side of our business, we entered a distribution agreement with Warner Bros. Publications under which Warner Bros. Publications will distribute Singing Machine karaoke music through a variety of channels, including its direct sales force, the Warner Elektra Atlantic (WEA) sales force, on the internet and related channels. CONFERENCE CALL Singing Machine has scheduled a conference call today at 11:00 a.m. ET. A simultaneous webcast may be accessed at www.fulldisclosure.com/company.asp?client=cb&ticker=smd. A replay will be available at this same Internet address after 1:00 p.m. ET. For a telephone replay, dial (800) 633-8284, reservation #21184540 after 1:00 p.m. ET. 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 MachineTM, MTVTM, NickelodeonTM, Hardrock AcademyTM, MotownTM and Care BearsTM brand names. The first to provide karaoke systems for home entertainment in the United States, Singing Machine sells its products in North America, Europe and Asia. FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements within the meaning of the 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 projected revenues, net income and net income per share.. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including the risk that (1)the Company will not be able to implement our business strategy, which includes but is not limited to cutting costs, moving our remaining inventory to our existing customers and other channels of distribution and increasing sales, (2) the Company will not have sufficient funding to meet our working capital requirements; (2) demand for the Company's products will not meet our expectations; (3) the impact of competitive products and pricing conditions in the karaoke industry and (4) general economic conditions and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports, including but not limited to the Company's Amended Annual Report on Form 10-KSB for the year ended March 31, 2003. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. 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. (tables attached) THE SINGING MACHINE COMPANY, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended Nine Months Ended December 31, December 31, ------------------------------ ------------------------------ 2003 2002 2003 2002 ------------ ------------ ------------ ------------ (as restated) (as restated) NET SALES $ 28,689,623 $ 45,659,446 $ 68,053,739 $ 81,915,443 COST OF SALES Cost of goods sold 30,782,268 36,628,126 64,948,809 64,155,095 Impairment of tooling 508,480 -- 508,480 -- ------------ ------------ ------------ ------------ GROSS PROFIT (2,601,125) 9,031,320 2,596,449 17,760,348 OPERATING EXPENSES: Compensation 1,097,327 1,257,519 3,552,718 2,827,823 Freight & handling 523,177 944,169 1,153,353 1,605,445 Selling, general & administrative expenses 3,410,116 1,748,400 8,908,899 4,675,279 ------------ ------------ ------------ ------------ TOTAL OPERATING EXPENSES 5,030,620 3,950,088 13,614,971 9,108,547 ------------ ------------ ------------ ------------ (LOSS) EARNINGS FROM OPERATIONS (7,631,744) 5,081,232 (11,018,521) 8,651,801 OTHER INCOME (EXPENSES): Other income 32,098 38,628 (50,882) 196,648 Interest expense (687,178) (117,704) (1,194,541) (228,597) Interest income -- -- -- 11,943 ------------ ------------ ------------ ------------ NET OTHER (EXPENSES) INCOME (655,079) (79,076) (1,245,422) (20,006) NET (LOSS) EARNINGS BEFORE INCOME TAX (8,286,825) 5,002,156 (12,263,944) 8,631,795 INCOME TAX EXPENSE 2,163,776 1,681,629 1,160,678 2,674,659 ------------ ------------ ------------ ------------ NET (LOSS) EARNINGS $(10,450,601) $ 3,320,527 $(13,424,622) $ 5,957,136 ============ ============ ============ ============ (LOSS) EARNINGS PER SHARE: Basic $ (1.20) $ 0.41 $ (1.58) $ 0.74 Diluted $ (1.20) $ 0.37 $ (1.58) $ 0.67 WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING: Basic 8,729,818 8,123,548 8,503,065 8,101,441 Diluted 8,729,818 8,944,027 8,503,065 8,947,897
THE SINGING MACHINE COMPANY, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, March 31, 2003 2003 ------------ ------------ (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 235,958 $ 268,265 Restricted Cash 866,413 838,411 Accounts Receivable, net 14,729,176 5,762,944 Due from manufacturer 1,112,200 1,091,871 Inventories, net 8,029,371 25,194,346 Prepaid expense and other current assets 2,294,377 1,483,602 Deferred tax asset -- 1,925,612 ------------ ------------ TOTAL CURRENT ASSETS 27,267,495 36,565,051 PROPERTY AND EQUIPMENT, NET 1,365,687 2,026,252 OTHER NON-CURRENT ASSETS 970,464 343,991 ------------ ------------ TOTAL ASSETS $ 29,603,646 $ 38,935,294 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Bank overdraft 85,236 316,646 Accounts payable $ 5,331,470 $ 8,486,009 Accrued expenses 2,587,579 1,443,406 Subordinated debt-related parties 1,000,000 400,000 Revolving credit facility 7,115,114 6,782,824 Income taxes payable 2,872,509 3,821,045 ------------ ------------ TOTAL CURRENT LIABILITIES 18,911,908 21,249,930 ------------ ------------ LONG TERM LIABILITIES Convertible debentures, net of discount 954,210 -- ------------ ------------ TOTAL LIABILITIES 19,946,118 21,249,930 SHAREHOLDERS' EQUITY Preferred stock, $1.00 par value; 1,000,000 shares authorized, no shares issued and outstanding -- -- Common stock, Class A, $.01 par value; 100,000 shares authorized; no shares issued and outstanding -- -- Common stock, $0.01 par value; 18,900,000 shares authorized; 8,752,320 and 8,171,678 shares issued and outstanding 87,523 81,717 Additional paid-in capital 10,234,410 4,843,430 Retained earnings (664,405) 12,760,217 ------------ ------------ TOTAL SHAREHOLDERS' EQUITY 9,657,528 17,685,364 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 29,603,646 $ 38,935,294 ============ ============
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