SECURITIES AND EKCEANGE COMMISSION
WASHINGTON, DC 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
Commission File
Number 1-1927
(CHECK ONE)
[X] Form 10-K and Form 10-KSB [ ] Form 11-K
[ ] Form 20-F [ ] Form 10-Q and Form 10-QSB [ ] Form N-SAR
For period ended March 31, 2004
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[ ] Transition Report on Form 10-K and Form 10-KSB
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form l0-Q and Form 10-QSB
[ ] Transition Report on Form N-SAR
For the transition period ended
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Read Attached Instruction Sheet Before Preparing Form. Please Print or Type.
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein:
If the notification relates to a portion of the filing checked above, identify
the item(s) to which the notification relates:
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PART I
REGISTRANT INFORMATION
Full name of registrant The Singing Machine Company, Inc.
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Former name if applicable
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Address of principal executive office (Street and number) 6601 Lyons Road,
Bldg, A-7
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City, state and zip code Coconut Creek, FL 33073
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PART II
RULE 12B-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25 (b), the
following should be completed. (check box if appropriate.)
X(a) The reasons described in reasonable detail in Part III
o(pound) this form could not be eliminated without
unreasonable effort or expense;
X(b) The subject annual report, semi-annual report, transition
report on Form 10-K, 10-KSB, 20-F, 11-K or Form N-SAR, or
portion thereof will be filed on or before the 15th
calendar day following the prescribed due date; or the
subject quarterly report or transition report on Form 10-Q,
10-QSB, or portion thereof will be filed on or before the
fifth calendar day following the prescribed due date; and
(c) The accountant's statement or other exhibit required by
Rule 12b-25(c) has been attached if applicable.
PART III
NARRATIVE
State below in reasonable detail the reasons why Form 10-K, 10-KSB,
11-K, 20-F, 10-Q, 10-QSB, N-SAR or the transition report portion thereof could
not be filed within the prescribed time period. (Attach extra sheets if needed.)
The Registrant is unable to file its Annual Report on Form 10-K within
the required time period because there have been significant changes in
accounting personnel at the Registrant during the last 3 months. The Registrant
hired a new Chief Financial Officer, effective as of April 9, 2004 and a new
controller joined effective as of April 14, 2004. The new accounting team needs
additional time to review and finalize the Registrant's Annual Report on
Form 10-K for the fiscal year ended March 31, 2004 so as to ensure completeness
and accuracy.
PART IV
OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification.
Jeff Barocas, Chief Financial Officer 954 596-1000 ext. 16
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13
or 15(d) of the Securities Exchange Act of 1934 or Section
30 of the Investment Company Act of 1940 during the
preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed?
If the answer is no, identify report(s).
[X] Yes [ ] No
(3) Is it anticipated that any significant change in results of
operations from the corresponding period for the last
fiscal year will be reflected by the earnings statements to
be included in the subject report or portion thereof?
[X] Yes [ ] No
If so: attach an explanation of the anticipated change,
both narratively and quantitatively, and, if appropriate,
state the reasons why a reasonable estimate of the
results cannot he made.
The Registrant anticipates significant changes in its results of
operations for the year ended March 31, 2004("fiscal 2004") compared to the year
ended March 31, 2003 ("fiscal 2003"). The Registrant expects to incur a net loss
of $22.7 million, or $2.65 per share, on revenues of $70.5 million in fiscal
2004 compared to net income of $1.2 million, or $0.14 per diluted share on
revenues of $95 million in fiscal 2003.
The Registrant's gross profit decreased to $1.9 million, or 2.7% of
total revenues in fiscal 2004 compared to gross profit of $23.2 million or 24.4%
of total revenues in fiscal 2003. The decrease in gross profit was primarily due
to a number of factors, including but not limited to (i) sales made at lower
prices to generate cash for operations and (ii) write-down of inventory.
The Registrant has attached as Exhibit A preliminary and unaudited
consolidated financial statements for the fiscal year ended March 31, 2004. The
Registrant expects to complete the Form 10-K and to file it within the extension
period allowed.
The Singing Machine Company, Inc.
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(Name of Registrant as Specified in Charter)
Has caused this notification to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: June 30, 2004 By: /s/Jeff Barocas
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Jeff Barocas
Chief Financial Officer
EXHIBIT A
THE SINGING MACHINE COMPANY, INC. AND SUBSIDIARY
PRELIMINARY AND UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
March 31, March 31, March 31,
2004 2003 2002
------------ ------------ -------------
(unaudited) (audited) (as restated)
Net sales $ 70,541,128 $ 95,613,766 $ 62,475,753
Cost of sales:
Cost of goods sold 68,279,589 72,329,035 40,852,840
Impairment of tooling 442,989 -- --
------------ ------------ ------------
Gross profit 1,818,550 23,284,731 21,622,913
Operating expenses:
Advertising 2,340,439 5,032,367 2,377,638
Commissions 1,024,883 997,529 1,294,543
Compensation 5,048,831 3,637,559 2,486,547
Freight & handling 1,423,082 2,112,435 1,242,910
Royalty expense 2,294,727 2,257,653 1,862,116
Selling, general &
administrative expenses 9,881,887 7,632,957 4,123,779
------------ ------------ ------------
Total operating expenses 22,013,849 21,670,501 13,387,533
------------ ------------ ------------
(Loss) income from operations (20,195,299) 1,614,230 8,235,380
Other income (expenses):
Other income 22,116 196,537 44,368
Interest expense (1,752,952) (406,126) (112,123)
Interest income 1,216 11,943 16,934
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Net other expenses (1,729,620) (197,646) (50,821)
------------ ------------ ------------
(Loss) income before
provision for income taxes (21,924,919) 1,416,584 8,184,559
Provision for income taxes 758,505 198,772 1,895,494
------------ ------------ ------------
Net (loss) income $(22,683,424) $ 1,217,812 $ 6,289,065
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(Loss) earnings per common share:
Basic $ (2.65) $ 0.15 $ 0.88
Diluted $ (2.65) $ 0.14 $ 0.79
Weighted average common
and common equivalent shares:
Basic 8,566,116 8,114,330 7,159,142
Diluted 8,566,116 8,931,385 7,943,473
THE SINGING MACHINE COMPANY, INC. AND SUBSIDIARY
PRELIMINARY AND UNAUDITED CONSOLIDATED BALANCE SHEETS
March 31, March 31,
2004 2003
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ASSETS (unaudited) (audited)
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Current assets:
Cash and cash equivalents $ 356,342 $ 268,264
Restricted cash 874,283 838,411
Accounts receivable, less allowances
of $98,000 and $406,000, respectively 3,806,166 5,762,944
Due from manufacturers 134,964 1,091,871
Inventories, net 5,228,060 25,194,346
Prepaid expense and other current assets 783,492 1,449,505
Insurance receivable 800,000 --
Refundable tax 1,178,512 --
Deferred tax asset -- 1,925,612
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Total current assets 13,161,819 36,530,953
Property and equipment, at cost
less accumulated depreciation of
$2,567,000 and $1,473,000, respectively 983,980 1,096,424
Other non-current assets 615,773 1,307,917
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Total assets $ 14,761,572 $38,935,294
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank overdraft $ 62,282 $ 316,646
Accounts payable 3,995,851 7,553,007
Accrued expenses 3,481,905 1,443,406
Customer credits on account 2,111,485 933,002
Subordinated debt-related parties 1,000,000 400,000
Revolving credit facilities -- 6,782,824
Income taxes payable 2,447,746 3,821,045
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Total current liabilities 13,099,269 21,249,930
Convertible debentures, net of
unamortized discount of $2,554,511 1,445,489 --
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Total liabilities 14,544,758 21,249,930
Shareholders' equity
Preferred stock, $1.00 par value;
1,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, Class A, $.01 par value; 100,000
shares authorized; no shares issued
and outstanding -- --
Common stock, $0.01 par value;
18,900,000 shares authorized;
8,752,318 and 8,171,678 shares
issued and outstanding 87,523 81,717
Additional paid-in capital 10,052,498 4,843,430
Accumulated (deficit) / retained earnings (9,923,207) 12,760,217
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Total shareholders' equity 216,814 17,685,364
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Total liabilities and shareholders' equity $ 14,761,572 $38,935,294
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