Karaoke machine maker The Singing Machine Company(OTCBB: SMDM) has reported that its second fiscal quarter results were able to meet its numbers from the same period last year, despite being forced to delay some shipments to its retail customers.
For the three months that ended September 30, the company reported net income of $1.4 million - essentially flat when compared with $1.5 million a year ago. On a per share basis, income was unchanged year-over-year at 4 cents per share, but rose from a loss of one cent per share in its fiscal first quarter.
Sales for the quarter increased 1 per cent to $14.3 million from $14.1 million in the second quarter of 2011.
The company said that flat growth in net sales and profit was primarily a timing issue, due to retail customers taking delivery later in the year for the holiday.
"We're pleased with our results so far," said CEO Gary Atkinson.
"We were able to meet our 2nd quarter numbers from the prior year, despite being forced to delay some shipments to some of our retail customers.
"As we head into our holiday season, look for us in new and existing retail stores and keep your eyes out for some Black Friday deals. We're also pleased to announce our new website launch which you can visit at www.singingmachine.com."
Gross margins during the latest period improved to 24.1 per cent from 22.6 per cent a year earlier. Total operating expenses climbed to $2.0 million from $1.7 million.
The Singing Machine's karaoke machines, accessories, karaoke music downloads, and musical instruments are sold under the brands of Singing Machine, SMDigital and Sound X.
The company already has a number of partnerships with big box retailers nationwide for the sell-through of its products, and has signed "a lot of commitments with new retailers" for this coming holiday season.
It is also planning to release a number of new products in time for the upcoming holiday season - its peak sales period - with an iPad-docking karaoke machine along with a Retina display iPad App designed specifically for the new machine to provide thousands of streaming karaoke songs available for subscription.
For 2012, the company has also redesigned its flagship Pedestal Karaoke line, which is the company’s most visible and highest revenue generating line of products. New features will include recording functionality, easier music downloading experience, as well as enhanced iPhone support.
Its products are now featured across 1,800 stores across the US, with plans to expand its presence abroad, already selling its products in Europe and Australia.
Last month, the karaoke machine company said it secured a factoring and loan agreement with Crestmark Bank, which provided it with up to $5 million in accounts receivable financing.
The new funds allowed the karaoke machine maker to "significantly improve" its cash flow as it enters its peak holiday selling season.
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