0001493152-23-042363.txt : 20231121 0001493152-23-042363.hdr.sgml : 20231121 20231121170032 ACCESSION NUMBER: 0001493152-23-042363 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20231121 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20231121 DATE AS OF CHANGE: 20231121 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: 001-41405 FILM NUMBER: 231429028 BUSINESS ADDRESS: STREET 1: 6301 NW 5TH WAY, STE 2900 CITY: FORT LAUDERDALE STATE: FL ZIP: 33309 BUSINESS PHONE: (954) 596-1000 MAIL ADDRESS: STREET 1: 6301 NW 5TH WAY, STE 2900 CITY: FORT LAUDERDALE STATE: FL ZIP: 33309 8-K 1 form8-k.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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): November 21, 2023

 

THE SINGING MACHINE COMPANY, INC.

(Exact name of registrant as specified in charter)

 

Delaware   001-41405   95-3795478

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

6301 NW 5th Way, Suite 2900

Fort Lauderdale, FL 33309

(Address of principal executive offices) (Zip Code)

 

(954) 596-1000

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common stock, par value $0.01 per share   MICS   The Nasdaq Stock Market LLC (The Nasdaq Capital Market)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

 

Emerging growth

 

If an emerging growth company, indicate by check mart if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition

 

On November 21, 2023, The Singing Machine Company, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended September 30, 2023. The full text of the press release is furnished herewith as Exhibit 99.1.

 

The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth in such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

Exhibit No.   Description
     
99.1   Press Release dated November 21, 2023
101   Pursuant to Rule 406 of Regulation S-T, the cover page is formatted in Inline XBRL (Inline eXtensible Business Reporting Language).
104   Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).

 

 

 

 

SIGNATURE

 

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 hereunto duly authorized.

 

Date: November 21, 2023

 

  THE SINGING MACHINE COMPANY, INC.
     
  By: /s/ Gary Atkinson
    Gary Atkinson
    Chief Executive Officer

 

 

 

EX-99.1 2 ex99-1.htm

 

Exhibit 99.1

 

 

Singing Machine Announces Results of Operations For Second Quarter Fiscal 2024

 

Fort Lauderdale, FL, November 21, 2023 — The Singing Machine Company, Inc. (“Singing Machine” or the “Company”) (NASDAQ: MICS) — the North American leader in consumer karaoke products — today released its results of operations for the three months ended September 30, 2023. Financial highlights are as follows:

 

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 ended September 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 ended September 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 of September 30, 2023.

 

Gary Atkinson, Singing Machine’s Chief Executive Officer, commented, “We are pleased to share our results of operations for this quarter with shareholders. We experienced several unique challenges this past quarter, most notably with our transition from an in-house logistics and shipping model to a fully outsourced 3PL model. After ten plus years of perfecting this process in-house, it was a significant accomplishment for the team to transition to this new model during our busiest time of year. This transition to an outsourced logistics model is expected to help mitigate the costs of rising warehousing and staffing expenses for the Company for many years to come.”

 

“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 $3.0 million compared to the same period last year, and we have successfully expanded our presence into Canada with more retail distribution supported by a local 3PL Canada warehouse.”

 

 
 

 

“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 Mr. Atkinson.

 

Earnings Call Information:

 

The Company will host a conference call today, Tuesday, November 21, 2023, beginning at 10:00 AM Eastern time to discuss these results. If you would like to participate on the call, please dial 800-225-9448 and use conference ID: MICS.

 

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 The Singing Machine

 

The Singing Machine Company, Inc. 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 www.singingmachine.com.

 

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 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.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   September 30,
2023
   March 31,
2023
 
   (unaudited)     
         
Assets          
Current Assets          
Cash  $3,212,564   $2,894,574 
Accounts receivable, net of allowances of $243,412 and $165,986, respectively   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, $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 and 4,220,259 and 3,167,489 outstanding, respectively   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 

 

 
 

 

The Singing Machine Company, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   For the Three Months Ended   For the Six Months Ended 
   September 30,
2023
   September 30,
2022
   September 30,
2023
   September 30,
2022
 
                 
Net Sales  $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 

 

 
 

 

The Singing Machine Company, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   For the Six Months Ended 
   September 30,
2023
   September 30,
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   $- 

 

 

 

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Cover
Nov. 21, 2023
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Nov. 21, 2023
Entity File Number 001-41405
Entity Registrant Name SINGING MACHINE CO INC
Entity Central Index Key 0000923601
Entity Tax Identification Number 95-3795478
Entity Incorporation, State or Country Code DE
Entity Address, Address Line One 6301 NW 5th Way
Entity Address, Address Line Two Suite 2900
Entity Address, City or Town Fort Lauderdale
Entity Address, State or Province FL
Entity Address, Postal Zip Code 33309
City Area Code (954)
Local Phone Number 596-1000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, par value $0.01 per
Trading Symbol MICS
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
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