The Singing Machine Company (OTCBB: SMDM) Friday released its full year fiscal results, noting a $1.1 million improvement in net earnings as a result of new retail accounts and a popularity spike in karaoke machines.
Shares of the karaoke machine maker were up 1.12 per cent on the back of the news, trading at nine cents.
For the 12-month period that ended March 31, the company - whose karaoke machines, accessories, karaoke music downloads, and musical instruments are sold under the brands of Singing Machine, SMDigital and Sound X, reported a 26 per cent rise in net sales to around $25.9 million.
Net income swung to $463,000, an increase of over $1 million, compared to a net loss of approximately $599,000 in the last fiscal year.
The Singing Machine said the significant improvement in net sales over last year is directly attributed to new retail accounts and the overall resurgence of karaoke popularity.
"I'm thrilled with the positive turnaround the company was able to achieve this fiscal year," said CEO Gary Atkinson.
"Our management team did an impressive job growing sales and holding gross margin, while maintaining our overhead.
"I believe the company is well positioned for the coming year with our experienced management team, seasoned manufacturing relationships in China, and recent success coming off a strong holiday season at retail."
Gross margin dipped just slightly to 21.8 per cent compared to 22.1 per cent in the prior year. The company noted that general and administrative expenses held steady at approximately $2.5 million.
VP of global sales and marketing, Bernardo Melo, said the company is hopeful that its turnaround success will continue with the support of its new and existing retail partners.
"We continue to look for more top line revenue growth without compromising gross margin, said Melo, adding, "we continue to develop and diversify our karaoke assortment to appeal to a wide base of consumers."
The Singing Machine is broadening its entry-level assortment, adding to its Pedestal line of karaoke machines, and developing more iOS-compatible hardware to support the popularity of Apple (NASDAQ:AAPL) devices, the company said.
The first to provide karaoke systems for home entertainment in the US, The Singing Machine sells its products in both North America and Europe.
The company, 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.
In March, the company appeared on ABC's daytime entertainment talk show The View. The karaoke machine maker's 4TV device was featured in a Dr. Gadget segment, which highlighted five of the coolest new gadgets on the market.
Dr. Gadget, a radio and TV personality, showcased the product during a one minute clip and described it as the "new wave and new evolution of karaoke."
The Singing Machine 4TV is the industry's first home karaoke machine to support digital karaoke downloads in MP3+G format. The 4TV product also offers a USB microphone and remote-control as well as an interactive user interface.
The machine is also compatible with traditional CD+G discs, and allows users to download songs to a jump-drive.