Friday, 10 February 2012

The Singing Machine says sales rise 25% in Q3, profit jumps

Karaoke machine maker The Singing Machine Company (OTCBB: SMDM) said Friday third fiscal quarter sales rose around 25 percent year-over-year, leading to a rise in profits.
For the three months that ended December 31, 2011, the company reported net sales of around $8.6 million, versus $6.9 million a year earlier, on strong holiday season sales.
Net income for the period surged to $134,000, up from $81,000 in the year-ago period.
Total operating expenses rose slightly to $1.7 million, but the company said that as a percentage of net sales, operating expenses actually dropped to 19.2 percent, compared with 22.2 percent in the third quarter one year ago.
"We're thrilled with our year-to-date results and strong sales of our Singing Machines this past holiday season," said CEO Gary Atkinson.
"We're achieving a milestone we haven't met in many, many years which is to show a strong profit through the first three quarters. With some new products and services in the pipeline, we're optimistic about our future growth potential."
Sales on Black Friday, known as the day after the Thanksgiving holiday in the US and the start of the holiday shopping season, more than met expectations.
The Singing Machine participated in Black Friday promotions with various retailers such as Toys ‘R’ Us, Target (NYSE:TGT), Kohl’s (NYSE:KSS), and also saw record Black Friday sales at (NYSE:WMT) and through online retailers like (NASDAQ:AMZN).
The company, whose karaoke machines, accessories, karaoke music downloads, and musical instruments are sold under the brands of Singing Machine, SMDigital and Sound X, did an approximate $1.3 million in sales on Black Friday alone.
Its STVG 559 karaoke machine was on the top 20 of Toys R Us sales that day.
For the nine month period that ended December 31, the company reported net sales of around $24.6 million, versus $17.4 million in the same period last year. The company also swung to a profit in the nine month period of $1.1 million, up from a net loss of around $100,000 in the comparable 2010 period.
The Singing Machine, which emerged from bankruptcy in 1998 and underwent a restructuring in 2004, has come a long way.
In 2009, it launched its online karaoke music download business through a partnership with content provider Stingray Digital, and became the first karaoke company to provide legal karaoke downloads, with a selection of more than 8,000 titles.
The business is 51 percent owned by a large manufacturing company in China, named Starlight, who acquired the stake in 2007. The company's products are now featured across 1,800 stores across the US, with plans to expand its presence abroad. It entered the holiday season with distribution through approximately 10,000 retail stores throughout North America.
In late January, the karaoke machine maker said it attended the 2012 Consumer Electronics Tradeshow (CES) in Las Vegas, meeting with both current and potential customers, and officially debuting its 4TV product.
Each year, major consumer electronics companies come together to unveil their newest technologies at the tradeshow.
This year, The Singing Machine officially introduced the Singing Machine 4TV - the industry's first home karaoke machine to support digital karaoke downloads in MP3+G format.
The 4TV product also offers other industry firsts, including a USB microphone/remote-control and interactive user interface to control users' karaoke experience. The machine is also compatible with traditional CD+G discs, and allows users to download songs to a flash-drive.
The Singing Machine Company's products are sold in North America, Europe and Australia.

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