- Revenues for the 12 months ended
March 31, 2023 were$39.3 million , as compared to$47.5 million for the same period in the prior year. The 17.3% decrease was largely due to a comparatively slower holiday retail season inNorth America as inflation, higher interest rates and overall economic conditions led to slower retail sales; - Gross margins improved to 23.4% for fiscal 2023, as compared to 22.8% for the prior fiscal year. The improvement was largely the result of cost rationalizations and lower logistics costs post COVID. These improvements were partially offset by higher labor costs and fuel costs;
- Operating expenses were
$12.9 million for the 12 months endedMarch 31, 2023 , as compared to$10.7 million for the same period in the prior year, an increase of 20.6%. Half of the$2.2 million increase represented expenses due to non-recurring transactions during the fiscal year, resulting in higher overall general and administrative expenses. The Company completed two capital raises and a successful uplisting to Nasdaq during fiscal 2023, resulting in approximately$1.1 million in one-time expenses. Excluding these items, operating expenses were$11.8 million , a 10.3% increase, as the Company added additional staffing resources to support new marketing and growth initiatives; and - The overall balance sheet improved significantly during the fiscal year 2023. Cash on hand improved to
$2.8 million atMarch 31, 2023 . The Company reduced its overall working capital investments by approximately$5.2 million during the year as the management team focused heavily on inventory management and building a more liquid short-term capital position. - The Company also heavily reduced its short-term liabilities. Current liabilities at
March 31, 2023 decreased 49%, from$12.0 million atMarch 31, 2022 to$6.1 million at fiscal 2023 year-end. As a result, the Company had no short-term debt and 67% less trade payables at fiscal year-end.
“Fiscal 2023 includes a number of major milestones for our team and the Company,” commented
“While we executed very well on virtually all fronts that were within our control, we were confronted by a backlog of inventory at the retail level during calendar 2022 caused by the supply chain bottleneck,” stated Atkinson. “This over-supply of inventory, together with lower overall economic demand during the holiday season, caused many of our retail customers to take a more conservative approach to stocking inventory last year. As these developments unfolded, we aggressively sought to control costs, invest carefully, and leverage our growth initiatives during the second half of the fiscal year as we began to turn our attention to the 2024 fiscal period.”
“As the premier in-home karaoke device manufacturer in
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
CONSOLIDATED BALANCE SHEETS
Assets | ||||||||
Current Assets | ||||||||
Cash | $ | 2,894,574 | $ | 2,290,483 | ||||
Accounts receivable, net of allowances of | 2,075,086 | 2,785,038 | ||||||
Due from | - | 100,822 | ||||||
Accounts receivable related party - Stingray Group, Inc. | 218,328 | 152,212 | ||||||
Accounts receivable related party - | 20,750 | - | ||||||
Inventories, net | 9,639,992 | 14,161,636 | ||||||
Prepaid expenses and other current assets | 266,068 | 344,409 | ||||||
Deferred financing costs | 84,667 | 7,813 | ||||||
Total Current Assets | 15,199,465 | 19,842,413 | ||||||
Property and equipment, net | 633,207 | 565,094 | ||||||
Deferred financing costs, net of current portion | 130,528 | - | ||||||
Deferred tax assets | - | 892,559 | ||||||
Operating Leases - right of use assets | 561,185 | 1,279,347 | ||||||
Other non-current assets | 124,212 | 86,441 | ||||||
Total Assets | $ | 16,648,597 | $ | 22,665,854 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 1,769,348 | $ | 5,328,215 | ||||
Accrued expenses | 2,265,424 | 1,732,355 | ||||||
Due to related party - | - | 14,400 | ||||||
Due to related party - | - | 48,650 | ||||||
Revolving lines of credit | - | 2,500,000 | ||||||
Refunds due to customers | 583,323 | 97,968 | ||||||
Reserve for sales returns | 900,000 | 990,000 | ||||||
Current portion of finance leases | 18,162 | 7,605 | ||||||
Current portion of installment notes | 80,795 | 74,300 | ||||||
Current portion of operating lease liabilities | 508,515 | 876,259 | ||||||
Subordinated note payable - | - | 352,659 | ||||||
Total Current Liabilities | 6,125,567 | 12,022,411 | ||||||
Finance leases, net of current portion | 46,142 | 10,620 | ||||||
Installment notes, net of current portion | 57,855 | 138,649 | ||||||
Operating lease liabilities, net of current portion | 87,988 | 457,750 | ||||||
Total Liabilities | 6,317,552 | 12,629,430 | ||||||
Commitments and Contingencies | ||||||||
Shareholders’ Equity | ||||||||
Preferred stock, | - | - | ||||||
Common stock | 31,675 | 12,212 | ||||||
Additional paid-in capital | 29,822,205 | 24,902,694 | ||||||
Subscriptions receivable | (5,891 | ) | - | |||||
Accumulated deficit | (19,516,944 | ) | (14,878,482 | ) | ||||
Total Shareholders’ Equity | 10,331,045 | 10,036,424 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 16,648,597 | $ | 22,665,854 |
See notes to the consolidated financial statements
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Twelve Months Ended | ||||||||
$ | 39,299,280 | $ | 47,512,161 | |||||
Cost of Goods Sold | 30,090,686 | 36,697,383 | ||||||
Gross Profit | 9,208,594 | 10,814,778 | ||||||
Operating Expenses | ||||||||
Selling expenses | 3,441,975 | 3,588,276 | ||||||
General and administrative expenses | 9,236,899 | 6,911,377 | ||||||
Depreciation | 228,004 | 245,890 | ||||||
Total Operating Expenses | 12,906,878 | 10,745,543 | ||||||
(Loss) Income from Operations | (3,698,284 | ) | 69,235 | |||||
Other Income (Expense), net | ||||||||
Gain from Paycheck Protection Plan loan forgiveness | - | 448,242 | ||||||
Gain - related party | - | 11,236 | ||||||
Gain from Employee Retension Credit Program refund | 704,297 | - | ||||||
Gain from settlement of accounts payable | 48,650 | 339,311 | ||||||
Loss from extinguishment of debt | (183,333 | ) | - | |||||
Interest expense | (432,700 | ) | (535,202 | ) | ||||
Finance costs | (46,618 | ) | (45,047 | ) | ||||
Total Other Income (Expense), net | 90,296 | 218,540 | ||||||
(Loss) Income Before Income Tax (Provision) | (3,607,988 | ) | 287,775 | |||||
Income Tax (Provision) | (1,030,474 | ) | (57,304 | ) | ||||
Net (Loss) Income | $ | (4,638,462 | ) | $ | 230,471 | |||
Net (Loss) Income per Common Share | ||||||||
Basic | $ | (1.65 | ) | $ | 0.14 | |||
Diluted | $ | (1.65 | ) | $ | 0.14 | |||
Weighted Average Common and Common Equivalent Shares: | ||||||||
Basic | 2,811,872 | 1,614,506 | ||||||
Diluted | 2,811,872 | 1,623,397 |
See notes to the consolidated financial statements
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Twelve Months Ended | ||||||||
Cash flows from operating activities | ||||||||
Net (Loss) Income | $ | (4,638,462 | ) | $ | 230,471 | |||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
Depreciation | 228,004 | 245,890 | ||||||
Amortization of deferred financing costs | 46,618 | 45,047 | ||||||
Change in inventory reserve | 535,553 | (271,892 | ) | |||||
Change in allowance for bad debts | 43,436 | (16,030 | ) | |||||
Loss from disposal of property and equipment | 2,565 | 4,394 | ||||||
Stock based compensation | 381,826 | 44,287 | ||||||
Change in net deferred tax assets | 892,559 | (5,395 | ) | |||||
Loss on debt extinguishment | 183,333 | - | ||||||
Paycheck Protection Plan loan forgiveness | - | (448,242 | ) | |||||
Gain - related party | - | (11,236 | ) | |||||
Gain from extinguishment of accounts payable | (48,650 | ) | (339,311 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 666,516 | (558,127 | ) | |||||
Due from banks | 100,822 | 4,456,298 | ||||||
Accounts receivable - related parties | (86,866 | ) | (64,171 | ) | ||||
Inventories | 3,986,091 | (8,399,489 | ) | |||||
Prepaid expenses and other current assets | 78,341 | (123,338 | ) | |||||
Other non-current assets | (37,771 | ) | 60,732 | |||||
Accounts payable | (3,510,217 | ) | 3,217,659 | |||||
Accrued expenses | 533,069 | 77,198 | ||||||
Due to related parties | (63,050 | ) | - | |||||
Customer deposits | - | (139,064 | ) | |||||
Refunds due to customers | 485,355 | (47,440 | ) | |||||
Reserve for sales returns | (90,000 | ) | 30,000 | |||||
Operating lease liabilities, net of operating leases - right of use assets | (19,344 | ) | (171 | ) | ||||
Net cash used in operating activities | (330,272 | ) | (2,011,930 | ) | ||||
Cash flows from investing activities | ||||||||
Purchase of property and equipment | (243,729 | ) | (117,573 | ) | ||||
Net cash used in investing activities | (243,729 | ) | (117,573 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from Issuance of stock - net of transaction expenses | 3,362,750 | 9,000,579 | ||||||
Proceeds from Issuance of stock - at the market offering | 30,522 | - | ||||||
Payment of redemption and retirement of treasury stock | - | (7,162,451 | ) | |||||
Net (payment) proceeds from revolving lines of credit | (2,500,000 | ) | 2,435,085 | |||||
Payment of deferred financing charges | (254,000 | ) | (37,501 | ) | ||||
Payment of early termination fees on revolving lines of credit | (183,333 | ) | - | |||||
Payments on installment notes | (74,299 | ) | (68,332 | ) | ||||
Proceeds from exercise of stock options | - | 14,000 | ||||||
Proceeds from exercise of pre-funded warrants | 168,334 | - | ||||||
Proceeds from exercise of common warrants | 989,651 | - | ||||||
Payment on subordinated note payable | (352,659 | ) | (150,000 | ) | ||||
Payments on finance leases | (8,874 | ) | (7,973 | ) | ||||
Net cash provided by financing activities | 1,178,092 | 4,023,407 | ||||||
Net change in cash | 604,091 | 1,893,904 | ||||||
Cash at beginning of year | 2,290,483 | 396,579 | ||||||
Cash at end of period | $ | 2,894,574 | $ | 2,290,483 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest | $ | 481,425 | $ | 546,545 | ||||
Cash paid for income taxes - SMC (Comercial Offshore de | $ | 34,390 | $ | - | ||||
Equipment purchased under capital lease | $ | 54,953 | $ | 23,651 | ||||
Issuance of common stock and warrants for stock issuance expenses | $ | 243,901 | $ | 547,838 | ||||
Operating leases - right of use assets and lease liabilities at inception of lease | $ | 191,951 | $ | 16,364 |
See notes to the consolidated financial statements
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the twelve months ended
Common Stock | Additional Paid in | Subscriptions | Accumulated | |||||||||||||||||||||
Shares | Amount | Capital | Receivable | Deficit | Total | |||||||||||||||||||
Balance at | 1,301,358 | $ | 13,014 | $ | 20,150,715 | $ | - | $ | (12,254,191 | ) | $ | 7,909,538 | ||||||||||||
Net Income | - | - | - | - | 230,471 | 230,471 | ||||||||||||||||||
Issuance of stock | 550,000 | 5,500 | 4,944,500 | - | - | 4,950,000 | ||||||||||||||||||
Issuance of pre-funded warrants | - | - | 4,881,667 | - | - | 4,881,667 | ||||||||||||||||||
Payment of stock issuance expenses | - | - | (831,088 | ) | - | - | (831,088 | ) | ||||||||||||||||
Issuance of stock for stock issuance expenses | 19,047 | 190 | (190 | ) | - | - | ||||||||||||||||||
Redemption and retirement of treasury shares | (654,105 | ) | (6,542 | ) | (4,301,147 | ) | - | (2,854,762 | ) | (7,162,451 | ) | |||||||||||||
Issuance of common stock - directors | 575 | 6 | 4,994 | - | - | 5,000 | ||||||||||||||||||
Issuance of common stock - non-employee | 1,667 | 17 | 16,983 | - | - | 17,000 | ||||||||||||||||||
Employee compensation-stock option | - | - | 22,287 | - | - | 22,287 | ||||||||||||||||||
Exercise of stock options | 2,667 | 27 | 13,973 | - | - | 14,000 | ||||||||||||||||||
Balance at | 1,221,209 | 12,212 | 24,902,694 | - | (14,878,482 | ) | 10,036,424 | |||||||||||||||||
Net Loss | - | - | - | - | (4,638,462 | ) | (4,638,462 | ) | ||||||||||||||||
Issuance of common stock | 1,000,000 | 10,000 | 3,990,000 | - | - | 4,000,000 | ||||||||||||||||||
Payment of stock issuance expenses | - | - | (637,250 | ) | - | - | (637,250 | ) | ||||||||||||||||
Issuance of common stock - at the market offering | 14,230 | 143 | 36,270 | (5,891 | ) | - | 30,522 | |||||||||||||||||
Exercise of pre-funded warrants | 561,113 | 5,611 | 162,723 | - | - | 168,334 | ||||||||||||||||||
Exercise of common stock warrants | 353,445 | 3,534 | 986,117 | - | - | 989,651 | ||||||||||||||||||
Issuance of common stock - directors | 2,468 | 25 | 19,991 | - | - | 20,016 | ||||||||||||||||||
Issuance of common stock - officers | 3,335 | 33 | 31,216 | - | - | 31,249 | ||||||||||||||||||
Issuance of common stock - non-employee | 10,000 | 100 | 93,600 | - | - | 93,700 | ||||||||||||||||||
Employee compensation-stock option | - | - | 236,861 | - | - | 236,861 | ||||||||||||||||||
Rounding of common stock issued due to reverse split | 1,688 | 17 | (17 | ) | - | - | - | |||||||||||||||||
Balance at | 3,167,488 | $ | 31,675 | $ | 29,822,205 | $ | (5,891 | ) | $ | (19,516,944 | ) | $ | 10,331,045 |
See notes to the consolidated financial statements.
Source:
2023 GlobeNewswire, Inc., source